French plane maker’s fraudulent deals with SriLankan bared

-$2m paid to the wife of a Sri Lankan Airlines executive through a Brunei shell company

French plane maker Airbus has been accused for paying bribes through agents around the world (including Sri Lanka) to stack the decks in its favour and win contracts around the globe, media reports said.

A judges in London on Friday approved a record €3.6bn (£3bn, $3.9bn) settlement to be paid by French plane maker Airbus (AIR.PA) over allegations of bribery.

The court also approved a deferred prosecution agreement struck between the UK’s Serious Fraud Office and Airbus.

The deal will see Airbus pay €991m (£832m, $1bn) to UK authorities as part of a global settlement worth €3.6bn. The settlement ends probes in the UK, France, and United States and is “the world’s largest global resolution for bribery”, the SFO said.

Airbus has been under investigation by the SFO for four years over allegations external consultants used by the company paid bribes in Sri Lanka, Malaysia, Indonesia, Taiwan, and Ghana between 2011 and 2015. The investigation was launched after Airbus discovered inconsistencies in disclosures made about external consultants.

Outlining detailed findings, the UK’s Serious Fraud Office (SFO) said Airbus had hired the wife of a Sri Lankan Airlines executive as its intermediary and misled Britain’s UKEF export credit agency over her name and gender, while paying $2 million to her company.

Meanwhile, the Transparency International Sri Lanka (TISL) in a statement said that as aircraft manufacturer Airbus reached a record 3.6 Billion Euro settlement with US, UK and French authorities following a 4 year investigation into allegations of bribery and corruption, Transparency International Sri Lanka wishes to highlight the importance of paying compensation to the countries who are the victims of corrupt deals involving Airbus.

The statement of facts issued on 31 January 2020 as part of the Deferred Prosecution Agreement reached between Airbus and the prosecuting authorities, indicates that Airbus had agreed to pay out a sum of 16.84 Million US dollars to a company registered in Brunei under the wife of an executive at SriLankan Airlines. Furthermore, the statement reads that Airbus had paid out a sum of 2 Million US dollars of the agreed amount to the company. The statement of facts is available here.

TISL Executive Director Asoka Obeyesekere said, “It is important to recall that the fallout from this deal is widely reported to have cost in excess of 17 billion rupees (USD 116mn [2015]) in cancellation penalties.  Given that the evidence now shows that corruption was involved in the procurement process, it is imperative that action is taken both internationally and locally to ensure that Airbus and its agents are held accountable for losses inflicted on Sri Lanka.”

Obeyesekere added, “The settlement reached between Airbus and prosecuting authorities in the US, UK and France should by no means be interpreted as a clean slate. The actions of Airbus and its agents as far as Sri Lanka is concerned is emblematic of corrupt and exploitative business practices which prey on the vulnerable.”

TISL had previously highlighted this issue in a letter addressed to the Presidential Commission of Inquiry into Allegations of Large-Scale Fraud & Malpractice in SriLankan Airlines. The letter dated August 2018 was accompanied by a report compiled by Corruption Watch UK, detailing potentially corrupt deals involving Airbus and several other airlines and a letter co-signed by TISL along with Civil Society Organisations (CSOs) from France, Indonesia, Tunisia, the UK and the US. This letter dated June 2018 was addressed to the Serious Frauds Office in the UK, the Parquet National Financier in France, the US Department of Justice and the Organisation for Economic Cooperation and Development (OECD).

Key among the recommendations made by the CSOs was that countries where it is proven that Airbus or its agents have paid bribes, are fully compensated for harm caused. Whilst court approval was granted in the UK today for the Deferred Prosecution Agreement with Airbus, Sri Lankan authorities must take this opportunity to hold to account those responsible, both domestic and foreign, for the significant losses inflicted on the Sri Lankan public.

Download Full Statement: Statement of Facts listing offences in Regina V. Airbus SE