FRANCE: Media senses political scandal in EADS share probe

In their headlines and editorials, French newspapers publish their suspicions of government involvement in sale of EADS shares

The Straits Times
Thursday, Octorber 4, 2007

PARIS --- FRENCH newspapers mined the Watergate archive to describe the political ramifications of a share trading scandal enveloping Airbus parent EADS on Thursday, posing questions about "Who knew what, and when?"

Blanket coverage of suspicions of 'massive' insider trading, which have been sent to prosecutors, focused on the risk of instability at Europe's largest aerospace and defence group and the background role of French and German governments.

"Following suspicions of massive insider trading at EADS, the scandal is turning into an affair of state," said tabloid Le Parisien under a bold front-page headline, "The Affair".

Preliminary elements of what could develop into one of Europe's largest insider trading investigations were sent to prosecutors by the French stock market regulator AMF in September and disclosed by Le Figaro newspaper on Wednesday.

Investigators cited 21 current and former executives at EADS or Airbus and industrial shareholders DaimlerChrysler and Lagardere, a judicial source confirmed to Reuters.

Lagardere denied wrongdoing, EADS expressed surprise over the report's publication and DaimlerChrysler declined comment.

The AMF's interim report does not make any formal accusations, but its existence dominated Thursday's front pages.

The AMF's investigation focuses on whether managers and shareholders knew of a wave of industrial problems on the Airbus A380 superjumbo when they sold shares in the Spring of 2006.

Disclosure of the troubles in June that year hit EADS shares.

The French government distanced itself from the growing scandal on Wednesday, saying it had never sold any of its 15 percent stake in EADS since the group's creation in 2000, and could not be connected with any accusation of insider trading.

But editorialists highlighted the government's proximity to EADS and a history of political interference in the company, which had split into rival French and German camps. Many said the question was how early the government knew something was up.

"The French state is also in the firing line," said Les Echos financial daily in an editorial. "Certainly, it sold no shares. But it is not above suspicion. (If) it knew what was happening at Airbus it did not play its alerting role." Like most dailies, La Tribune pushed the industrial and financial investigation into the centre of French politics.

"EADS: from insider trading to an affair of state," the newspaper said in its front-page headline.

Date Posted: 10/4/2007