European aircraft manufacturer Airbus has agreed to settle corruption cases with regulators in the United Kingdom for a deal worth almost €1bn.
This deal is the culmination of a long drawn investigation into allegations by UK’s Serious Fraud Office (SFO) that the aircraft maker had had secure deals for supplying planes through the use of middlemen and bribes.
The settlement with the UK is a part of the greater deal between the company and investigators in three countries which was worth a total of €3.6bn. The other two countries with which Airbus had agreed to settle corruption charges are the United States and France.
The payments for the three settlements are being made under what is known as a deferred prosecution agreement (DPA) which is a form of corporate plea bargain.
Airbus has agreed to make a payment of about €500m with regulators in the US for the settlement in the case while it has agreed to a settlement amount of €2.1bn with the French national prosecutor, the Parquet National Financier, (PNF), in the cases.
The company announced the settlement earlier this week and it now needs to get approved by courts in the three countries.
More than 130,000 people are employed globally, including about 10,000 in the UK by the European planemaker that is headquartered in Toulouse in south-west France.
Airbus had itself reported the case of corruption to the regulators and had itself asked the regulators to inquire into documentation about use of overseas agents by the company. That prompted formal investigations into the activities of Airbus – first by the SFO and later by its French counterpart in 2016.
Export credit applications by Airbus were frozen by UK, French and German authorities in the run-up to the investigation by the SFO. Those were however later reversed in 2018. Export credits are financial instruments that are put to use by many national governments as a way of supporting its exporters which is often done by backing up the exporters and providing guarantees for bank loans offered to overseas buyers of the products of that particular country.
Export credits have come very handy in the past for airlines that are cash strapped as it gave them the ability to afford new Airbus planes.
There were concerns that no disclosure of the use of middlemen in such deals was made by Airbus which preceded the investigations.
Amid suspicions that arms export rules could also have been violated, information from the UK and French investigations was requested by the United States.
(Adapted from BBC.com)