European aircraft manufacturer Airbus has agreed to pay a total of $3.97 billion to US, British, and French authorities to settle bribery and corruption allegations made against it. The France-based company clarified that the settlement deal is however still subject to approval by the respective courts of each country.
Court hearings for the cases against Airbus in the US, France, and the UK are expected to begin on January 31. The corruption and bribery cases against the company stemmed from the findings of lengthy investigations into its practices. Investigators reportedly found that Airbus had been using middlemen to make under the table deals to increase its plane sales.
In a statement released this week, Airbus confirmed that it has reached an agreement in principle with the three countries, particularly with France's French Parquet National Financier, the UK Serious Fraud Office, and US regulators.
Investigations into Airbus illicit activities began in 2016, following reports from credible sources within the company. The UK's Serious Fraud Office and the French Parquet National Financier were the first ones to launch deep probes into the company's practices.
While investigations were underway, agencies from the UK, France, and Germany temporarily froze the company's export credit applications. The suspension was later lifted in 2018. The US entered the scene following reports that Airbus may have intentionally violated arms export rules through the use of middlemen, or "third-party consultants" in its dealings.
Since the investigation into its practices began more than four years ago, Airbus has quietly been restructuring its operations, effectively cutting ties with its third-party consultants. The company also culled its upper management. This included the recent departure of its former chief executive Tom Enders and its chief operating officer Fabrice Bregier. Both executives left the company last year, shortly after the exit of Airbus' sales chief John Leahy.
Airbus' previous CEO was heavily criticized for his mishandling of the allegations, effectively making matters worse for the company. His departure and the entry of new Airbus CEO Guillaume Faury has managed to somewhat turn around the situation. Faury had previously mentioned that he will primarily be focusing on rebuilding the company's reputation by moving forward and leaving its past mistakes behind.
While the settlement amount is massive, it will likely be much cheaper when compared to the money the company would be spending if the cases against would continue. If the company is found guilty of breaching US arms sales regulations, Airbus could be facing even stiffer penalties.
