European plane maker Airbus SE has established a new compliance review group led by outsiders amid allegations of corruption being investigated by British and other fraud watchdogs.
It is the second time in less than five years Airbus has sought outside help to clean up its internal processes after fraud allegations surfaced. Some of the issues that led to the compliance review in 2012 are still under scrutiny, including the company's actions in a more than $1 billion dollar deal to sell Eurofighter Typhoon combat jets to Austria a decade earlier.
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The establishment of the new compliance panel was triggered by the latest controversy that first surfaced a year ago around Airbus's use of middleman to win commercial plane deals. The panel, which will report to Chief Executive Tom Enders and the board, will have an open-ended advisory role.
"To embed irreproachable behaviors in all our business undertakings sustainably, we must take a hard look at both our systems and our culture," Mr. Enders said Monday in a statement announcing the latest review.
Austrian officials said Mr. Enders is one of the people it is investigating in its probe, which is examining whether the company overcharged the government for the sale of military planes. Airbus has denied wrongdoing and said it was cooperating with authorities.
The Austrian probe is one of several corruption investigations Airbus is battling. The British Serious Fraud Office has been examining alleged bribery by an Airbus subsidiary in business dealings in Saudi Arabia for several years. Airbus launched a compliance review in 2012 amid concerns over the Austrian deal and the British probe into the actions of its subsidiary in Saudi Arabia. At the time, it said it had tightened its compliance procedures and taken other steps aimed at preventing future slip-ups.
In 2016, Britain's SFO also began investigating Airbus's possible misuse of middlemen in winning plane deals. French officials also are probing the use of third-party intermediaries used during the sale of commercial airliners. Airbus has also said it had hired forensic accountants to help review what happened and has frozen payments to third-party consultants.
The new compliance review panel will include David Gold, who also reviewed compliance proceedings at Rolls-Royce Holdings PLC. The British aircraft engine maker at the time was under scrutiny by fraud investigators. Rolls-Royce this year entered deferred prosecution deals with the SFO, U.S. Department of Justice and Brazilian authorities and agreed to pay more than $800 million in fines. Noëlle Lenoir, a former French Minister of European Affairs, and Theo Waigel, an ex-German finance minister also complete the group.
The three panel members come from countries that are some of Airbus's biggest financial backers. The U.K., German and France, which typically support some jetliner deals with export credit finance guarantees, have suspended that assistance amid the fraud probes. The lack of export credit backing has weighed on Airbus cash flow.
An Airbus official said the company was not asked to take the action but was trying to demonstrate it is taking tangible steps to improve ethics performance.
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(END) Dow Jones Newswires
May 23, 2017 02:47 ET (06:47 GMT)