KEY POINTS:
A political and financial scandal is threatening to engulf the European Airbus company and the French government.
Twenty-one senior executives and two large corporate shareholders were reported to have made "strange, massive and simultaneous" sales of shares in the parent company of Airbus, just before the plane-maker announced
a calamitous delay to its super-jumbo, the A380, last year.
A preliminary report by the French financial markets watchdog has been forwarded to a judge who is investigating possible charges of "insider trading" against those who unloaded their shares.
They include the holding company belonging to the family of Arnaud Lagardere, co-president of Eads, the Airbus parent company.
M. Lagardere is one of France's wealthiest men and a close friend of President Nicolas Sarkozy.
Others said to have made "strange" sudden sales of shares include M. Lagardere's German co-president, Manfred Bischoff, and Noel Forgeard and Tom Enders, who were joint chief executives of Airbus.
The Germany company, DaimlerChrysler, one of the largest stakeholders, also dumped a large part of its holding.
The French government was tipped off about coming problems at Airbus the previous December, the report said.
It did not sell its shares in Eads but raised no objection to the large, sudden sales by other corporate and private shareholders.
No specific allegation of illegal share dealing is made against any person or company in the preliminary report by the Autorite des Marches Financiers (AMF).
But the report says there were "simultaneous and massive" sales of shares in the weeks before the delays to the A380 were announced on 13 June 2006.
The Largardere company and DaimlerChrysler each sold 7.5 per cent of Eads stock worth A2bn on 4 April.
The preliminary official report, leaked yesterday to the newspaper Le Figaro, describes the sales as "strange".
They "bear witness to anticipation ... of a future fall in the share price", the report says.
The day after the announcement of technical problems with the A380, the Eads share price fell 26.8 per cent.
Overall, the leaked watchdog report says up to 1,200 individuals who could have had inside knowledge of problems at Airbus, dumped more than 10 million shares before the official announcement.
Total "profits" from these individual sales are estimated at A90m.
All the individuals and companies who sold shares in that period have previously adamantly denied any illegal use of inside knowledge.
They have insisted that the delays to the A380 programme, and similar problems with the A350, were not revealed to senior officials at Airbus and Eads until just before they became public knowledge.
M. Lagardere's holding company repeated these denials yesterday and said it would start a libel action for the leaking of a "provisional document" which had led to "unfounded accusations".
One part of the AMF report suggests the coming difficulties at Airbus were known within the high ranks of the company as early as the previous December.
After a meeting with senior Eads officials, civil servants in the French Finance Ministry sent a note to the then finance minister, Thierry Breton, suggesting the French government should reduce its own large stake in the Airbus operation.
M. Breton did not follow this advice but is alleged to have raised no objections to sales by other shareholders.
In a statement yesterday, M. Breton said he had acted entirely honourably.
He had sold none of the French state's shares and had no right to comment on sales by others.
Opposition politicians called for a full inquiry into the affair, on top of the criminal and stock market investigations.
Trade unions at Eads were "angry and sickened" by the report but also suggested the leak might have been intended to "further destabilise" Airbus.
- INDEPNDENT