European Aeronautic Defence & Space Co. investors asked an Amsterdam court to order a probe centered on EADS disclosures of production delays for the Airbus A380, the world’s biggest passenger plane.
“Too much has gone wrong the past years,” Flip Wijers, a lawyer representing Irish Life Investment Managers Ltd., said at the hearing at the Amsterdam Court of Appeal’s Enterprise Chamber today. “And a lot is still going wrong.”
Disclosure of the delays sent EADS down a record 26 percent on June 14, 2006. Shareholders including Deutsche Bank AG’s DWS Investment SA, UBS Fund Management AG, Irish Life Investment and Deka Investment GmbH asked the Dutch court to order a probe into the company’s management and the events related to the production delays.
“The market didn’t expect the delay and didn’t have to expect the delay,” Wijers said. “And the market is always right.”
Seventeen current and former EADS executives were cleared in a separate probe by France’s market regulator in December of trading on inside information about the delays.
The Autorite des Marches Financiers also reviewed whether EADS properly disclosed the delays to investors. The AMF said Dec. 18 that its Sanctions Commission, which makes the final decision on penalties, had found no evidence of market violations. The agency absolved the company and shareholders Daimler AG and Lagardere SCA.
EADS “already” made the first announcements about production delays in the summer of 2005, said Jeroen Ouwehand, EADS’s lawyer. This decision needs to be taken into account in the current procedure, he said.
“EADS didn’t fail to reveal the truth,” Ouwehand said.
Judge Peter Ingelse said the court aims to rule “as soon as possible.”
The A380 continues to be behind schedule, with Airbus delivering about half the number of planes last year than originally planned. For 2010, Airbus wants to ship about 20 A380s, and management has said the company won’t break even on the program for several years.