Austria To Sue Airbus For Fraud In Eurofighter Deal

Austria is set to file a lawsuit against Airbus of wilful deception and fraud linked to $2.1 billion Eurofighter jets deal in 2003.

A recently completed ministry investigation, to be released on Thursday, found that Airbus and Eurofighter misled Austria with fraudulent intent about the purchase price, APA news agency reported Thursday.

Austria initially ordered 18 of the Eurofighter jets but reduced it to 15 in 2007. It then ordered a review of the purchase four years ago following bribery allegations.

Allegations surfaced almost immediately after the announcement in 2003 that money was pocketed by politicians, civil servants and others via brokers for side deals accompanying the purchase, the agency reported.

The Eurofighter is built by a consortium comprising Europe's largest aerospace group Airbus, British defence giant BAE Systems and Italian group Leonardo.

While offset deals were part of the agreement to generate additional business for Austrian companies, the costs for those deals should have been reported separately.

Austrian and German prosecutors have been investigating the case for years. Munich prosecutors expect to close preliminary proceedings by mid-year.

Europe's largest aerospace group has said it is co-operating with the German probe into the fighter sale to Austria as well as three other criminal probes into suspected irregularities in defence or security markets, including a British investigation into a $3.3 billion communications deal with Saudi Arabia.

On Wednesday, people familiar with the matter said Airbus was shaking up its international marketing arm amid a separate probe by Britain's Serious Fraud Office into suspected bribery and corruption in the sale of commercial aircraft.