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Former Airbus Boss Detained

By Reuters

Former Airbus chief executive Gustav Humbert has been placed in police custody for questioning in a widening probe into allegations of insider trading at EADS. Former Airbus Boss Detained

Published: Mon, June 30, 2008 - 1:25 pm

PARIS (Reuters) - Former Airbus chief executive Gustav Humbert has been placed in police custody for questioning in a widening probe into allegations of insider trading at European aerospace group EADS, a police source said on Monday.

Humbert, who resigned in 2006 after the announcement of delays to the A380 superjumbo, which sharply hit the EADS share price, is the third former executive to be questioned while in temporary police detention.

Humbert, a German national, was being held in Paris, the police source said. Under French rules, such custody can last up to 48 hours. Police can then decide whether to free him or take him before a judge, who would then decide whether or not to place him under formal investigation, a step short of charges.

Former EADS co-chief executive Noel Forgeard and former international director Jean-Paul Gut were questioned under detention and placed under formal investigation this month.

French police are investigating claims that EADS top executives and industrial shareholders knew of the increasing threat of delays to the Airbus A380 superjumbo when they sold shares in 2005 and 2006.

The announcement of worsening delays in building the world's largest airliner wiped a quarter off the value of Airbus parent EADS shares on a single day in June 2006.

A total of 17 current and former executives, along with EADS shareholders Lagardere and Daimler, were cited in a recent report to prosecutors on suspected insider trading by France's market watchdog AMF.

EADS has said it is standing by its managers, many of whom have protested their innocence, and communicated transparently about progress on key industrial programs.

In the United States, two law firms submitted class-action law suits in June on behalf of U.S. investors who bought EADS shares in Europe in 2005 and 2006, claiming they had been duped.