Airbus SE (Netherlands)
ISINs: NL0000235190
Relevant Period: April 24, 2015 - December 31, 2020
Deadline: August 31, 2023
Formerly known as the European Aeronautic Defence and Space Company NV (EADS NV), Airbus SE is a Dutch multinational aerospace corporation, operating through its commercial aircraft, defense and space, and helicopter divisions. In terms of revenue, Airbus is the second largest manufacturer of commercial aircraft in the world, slightly behind Boeing, and also manufactures military transports, satellites, and launch vehicles. Airbus shares (ISIN NL0000235190) are listed on the Frankfurt Stock Exchange; the Euronext Paris; and the Spanish stock exchanges in Madrid, Bilbao, Barcelona, and Valencia.
Unbeknownst to investors and the public, from approximately 2008 to 2015, Airbus SE was offering and paying bribes via its employees, executives, and “Business Partners,” to government officials and airline executives around the world in order to obtain illegal business advantages and win orders on hundreds of aircraft. Business Partners were third parties used to increase Airbus’s international footprint and assist Airbus in winning sales to customers in several countries around the world. Airbus disguised and concealed the true purpose of the Business Partners’ engagement in a number of ways, including by creating fake and fraudulent contracts, using fictitious invoices for services that were never performed, creating false activity reports on behalf of Business Partners, and developing certain “special projects” and investment opportunities that were actually designed as elaborate and secret ways to fund Business Partners. In addition, Airbus concealed relationships with certain Business Partners by, among other things, only engaging in oral agreements, using fake non-reimbursable loans, and paying the Business Partners indirectly.
Airbus not only failed to disclose what the Company and its Business Partners were doing from roughly 2008 to 2015, but also falsely assured investors of its performance and ethics compliance in its annual reports and public statements, while promoting a false narrative surrounding its growing international footprint in the relevant emerging markets. The event that led to the external bribery investigations was not initiated by Airbus but rather by the U.K. Export Finance agency (UKEF) on April 24, 2015, when it raised questions to Airbus about the Company’s due diligence procedures and had flagged transactions in Sri Lanka. This eventually led to Airbus disclosing on April 1, 2016 that it had discovered “certain inaccuracies” relating to U.K. export credit financing applications for customer airlines that could result in a disruption in funding, without identifying the nature of the problem.
On August 8, 2016, the U.K. Serious Fraud Office (SFO) announced it had opened a criminal investigation under the U.K. Bribery Act 2010 into allegations of fraud, bribery and corruption in Airbus’s civil aviation business relating to irregularities concerning third party consultants. Thereafter, on March 16, 2017, Airbus announced that the French Parquet National Financier (PNF) had also opened a preliminary investigation into the same subject. Despite these announcements, Airbus continued to assure investors that ethics and compliance was a top priority, and that it had strengthened its anti-corruption programs. On December 20, 2018, it was reported that the U.S. Department of Justice had opened its own investigation based on violations of the Foreign Corrupt Practices Act (FCPA), Arms Export Control Act (AECA), and the International Traffic in Arms Regulations (ITAR) relating to the SFO and PNF’s allegations of corruption against Airbus, raising the stakes of probes already underway in Britain and France.
On January 27, 2020, reports began to emerge of a potential settlement between Airbus and regulators in the U.K., France, and U.S. related to the ongoing bribery and corruption probe, revealing that the Company faced potentially billions of dollars in fines. Then on January 31, 2020, it was reported that Airbus agreed to a deal with all three countries’ agencies to settle the violations for roughly $4 billion total. In return, all three agencies have agreed to suspend prosecution for three years. If Airbus complies with the agreements for the three years (ending January 31, 2023), the prosecutions in each jurisdiction will be discontinued. These disclosures, as well as the reports of potential settlement and the actual settlement, caused Airbus’s stock price and market capitalization to drop significantly.
We are currently analyzing a potential action against Airbus in the Netherlands based on the facts above. For a complimentary and confidential analysis of your transactions in Airbus stock, we are requesting transaction data for ISIN NL0000235190 from April 24, 2015 to December 31, 2020, inclusive, while also including the applicable SEDOL and place of trade.
For more information, please contact airbusinvestorclaims@drrt.com.
Koninklijke Philips N.V. (NL)
ISINs: NL0000009538
Relevant Period: October 30, 2015 - January 29, 2024
Deadline: June 28, 2024
Koninklijke Philips N.V. (“Philips”) is a multinational health technology and electronics conglomerate headquartered in Amsterdam, the Netherlands. As a part of its health technology business, Philips, through its Philips Respironics division in Pennsylvania, manufactures and sells certain products intended to improve people’s breathing abilities. These devices include Continuous Positive Airway Pressure (“CPAP”) and Bi-Level Positive Airway Pressure (“Bi-PAP”) machines – commonly used to treat sleep apnea – as well as mechanical ventilators, which treat respiratory failure. Many of these devices utilized polyester-based polyurethane (“PE-PUR”) foam for sound abatement purposes.
Throughout the Relevant Period (October 30, 2015 – January 29, 2024), Philips manufactured and sold millions of Bi-PAP, CPAP, and mechanical ventilator devices to the point that by 2021 the annual sales from these devices accounted for EUR 750 million in EBITDA. However, as Philips aggressively grew its sales numbers and profits, it also worked, from as early as 2008, to suppress over 200,000 complaints raised by consumers concerning the health risks associated with using the devices.
According to various reports from the FDA and the DOJ, Philips was aware, from October 2015, at the latest, until 2021, of substantial health risks from PE-PUR foam degradation into carcinogenic particles, which would cause headaches, dizziness, irritation, vomiting, and, in the worst cases, cancer to users of Philips devices. Yet, none of the degradation issues were reported to the FDA, as required, nor were the affected devices recalled or further sales stopped, nor was the investing public informed of the potentially substantial financial consequences. To the contrary, Philips kept its best-selling – but defective - products on the market and continued to manufacture, market, and sell new ones. Nowhere in the Company’s risk disclosures between 2015-2021 was there any mention of health risks associated with the sale of the defective foam devices, nor of any potential regulatory action, personal injury consumer complaints, or likely substantial financial consequences. Instead, Philips touted its commitment to product quality and their compliance with U.S. Food and Drug Administration (“FDA”) regulations while continuing to reap record profits based on the sale of defective products.
It was not until April 26, 2021, that Philips finally disclosed the health risks associated with its affected sleep and respiratory care products in a press release announcing the Company’s financial results. Without knowledge of the bigger issues and financial consequences to come, the market still reacted negatively to this news, resulting in Philips’ share price to fall EUR 1.71 per share from EUR 48.21 to close at EUR 46.49 on April 26, 2021. The share price continued to drop over the next day by EUR 2.68 (5.6%) to close at EUR 45.53, resulting in a EUR 2.5 billion loss of market capitalization.
On June 14, 2021, Philips announced the recall of over 15 million products, including 20 different types of CPAP, Bi-PAP, and ventilator devices manufactured between 2009 and April 26, 2021. Following this announcement, Philips’ share price fell EUR 1.93 (4.16%) from EUR 44.40 to EUR 42.55, causing another EUR 1.7 billion loss of market capitalization.On July 26, 2021, less than two weeks after the prior recall, the Company revealed that it would stop the sales of its sleep therapy devices until further notice, removing substantial revenue and profits from its financial forecasts, resulting in a further decline of the stock price.
On January 12, 2022, Philips recalled another 1 million affected devices and increased the total provisions connected to the recalls by 45% to EUR 725 million. This number is close to the EUR 750 million in annual EBITDA earnings the Company realized from sales of the devices in 2021. However, Philips still failed to adequately account for the mounting litigation risk and the lack of revenue and earnings for years to come.
ABN AMRO Bank N.V. (Netherlands)
ISINs: NL0011540547
Relevant Period: November 20, 2015 - May 18, 2022
Deadline: June 28, 2024
ABN AMRO Bank N.V. (“ABN AMRO” or the “Company”) is a global bank headquartered in Amsterdam and listed in the Dutch Commercial Register.
From 2013 to 2019, De Nederlandsche Bank N.V. (“DNB”), the central bank of the Netherlands, conducted investigations into ABN AMRO's compliance with the Anti-Money Laundering and Counter Terrorism Financing Act (the “Act”) and discovered violations that were “repeatedly found to be serious and culpable,” resulting in several enforcement actions. In 2018, DNB also identified shortcomings by ABN AMRO regarding client due diligence and transaction monitoring regarding terrorism financing.
Several criminal investigations by the police and the Dutch Fiscal Information and Investigation Service (“FIOD”) also yielded indications that ABN AMRO might have violated the Act. As a result, on August 15, 2019, the Netherlands Public Prosecution Service (the “NPPS”) directed the FIOD to criminally investigate ABN AMRO for Act violations and related, culpable money laundering. On September 25, 2019, ABN AMRO and news outlets disclosed an Anti-Money Laundering (AML) investigation into the bank.
The investigation found that the compliance and audit teams reported shortcomings to the managing and supervisory boards via quarterly reports, “deep dive” reports, and audits, but were insufficiently addressed. As a result, the Company facilitated many large, unlawful transactions, such as hundreds of thousands of euros in false quarterly VAT returns by a single client; more than €4.3 million that were misappropriated to bankroll a client's gambling addiction; tens of millions of euros generated by two clients from one of the biggest instances of international corruption; and more than €17 million in international VAT carousel fraud by a single client. On April 19, 2021, the NPPS settled with ABN AMRO for €480 million, comprised of a €300 million fine and a €180 million disgorgement.
Following the results of the investigation, the share price of ABN AMRO fell 5.05% percent from the previous day with an increase of trading volume. In the following days, the share value continued to decrease following widespread attention for the settlement. Overall, from April 19, 2021 to April 22, 2021, the share price fell 7.4% percent, a total market capitalization loss of EUR 759,5 million.