EADS 'crisis' leaves future of Forgeard under a cloud

The future of the EADS co-chief executive Noel Forgeard was uncertain last night after a former French prime minister called for urgent stock-market and government investigations into the sale of shares in the company by leading executives in the weeks before Wednesday's crash in the share price.

M. Forgeard's position was made more precarious after EADS' co-chairman Arnaud Lagardère declined to give his chief executive his full backing and said that the company was facing a "major crisis" of confidence. He said that he, and other board members, had not been told of the major delays facing the A380 superjumbo programme until the past few days. Analysts and shareholders now doubted the ability of the company to carry "very complex" projects to a conclusion.

The disclosure on Tuesday that production problems would cut A380 deliveries next year by two-thirds, opening Airbus up to compensation claims running into billions of euros, wiped €5bn (£3.4bn) from EADS shares. Yesterday, they recovered some ground, closing 7 per cent higher at €20.

According to reports in the French press, M. Forgeard and three other members of the executive committee exercised millions of euros in stock options in March. M. For-geard's three children also sold shares. M. Lagardère also admitted yesterday that his group had sold 7.5 per cent of the capital of EADS in April. He denied, however, that this amounted to insider trading.

"If we were dishonest, we would have sold all our capital, not 7.5 per cent," he said. His decision to reduce his stake in EADS was taken last September, he said, and - "surprising as it might seem" - he was not aware of the A380 delays until recent days.

Laurent Fabius, the socialist prime minister in the 1980s, and candidate for the French presidency next year, called yesterday for two investigations into the suspicions of insider trading.

"We are led to understand that several EADS bosses sold massive chunks of the company several weeks before the sharp drop in the share price caused by the announcement of the delay to the A380," he said.

M. Fabius called on the French government - which is itself a major shareholder in EADS - and the stock exchange authorities to investigate whether the executives "knew about these difficulties" and "took financial advantage".

In an interview with the newspaper Le Monde, M. Lagardère declined to call for the head of M. Forgeard, who has, until now, enjoyed the strong backing of President Jacques Chirac and the French government.

The industrialist was, however, very critical of the EADS management's handling of the crisis.

"It is not just the [delivery] delays which are being punished [by the markets]. They are telling us that they have lost confidence in the ability of Airbus to complete very complex projects.

"We are faced with a major crisis and I can sympathise with analysts and shareholders who do not understand these new delays."

M. Largardère said that he had asked the Airbus boss Gustav Humbert last month whether new A380 delays were expected. He had been told there was no reason to expect any problem. The same answer had been given to financial analysts on 1 June.