The board of Avinco Group Holdings NV was replaced in January 2016. The recently appointed directors were the subject of a court case for mismanagement by the directors of Eolia Ltd in the autumn of 2106.
The Eolia team had been involved with Airbus SMO on "secret projects" since 2003 acting at the highest level in Airbus (dixit Ian Whitehall in front of the court in Amsterdam). it should be noted that Ian Whitehall, now officially a partner in Eolia, appeared to have the external lawyer who structured the various transactions under suspicion from 2003 to 2008, involving Airbus, Eolia and Avinco.
A forensic investigation was conducted at the request of the directors of Avinco Group Holdings NV in 2016 and 2017 and the report given to the court in Amsterdam. The court dismissed the allegations of mismanagement by the directors of Avinco Group Holdings NV, which had just been recently appointed.
You will find below a summary of some main points of the compliance report:
1. Eolia Limited was created with a capital of USD1,500.
2. Eolia Limited appeared to have been funded through loans/advances from Airbus, as well as bank guarantees provided by Airbus through the French investment bank Calyon.
3. Income from Airbus related entity were allegedly transferred to Eolia Limited and Eolia trading thus concealing the true sources and subsequent use of funds.
4. Loans from Airbus to Eolia Limited representing around USD 31 million was never repaid and never intended to be repaid, as the transaction had been structured to allow the transfer of the proceeds by Airbus as part of the operations of the SMO.
5.Despite having injected no capital (US$1,500) and the Eolia group making significant losses, the Eolia team got remunerated very generously by Airbus:
Two members of the Eolia team were paid respectively US$5.7 million and US$1.4 million.
The legal fees paid represented US$5.8 million, part of it was use to remunerate Ian Whitehall, who was then a partner at the law firm Burges Salmon and who is now officially the third partner in Eolia.
The judgement noted that in the submission to the court, Eolia had failed to disclose that it was in discussion with Airbus to obtain a settlement from Airbus and failed to disclose that Eolia had been funded and controlled by Airbus through a mechanism of Put and Call with Projic 9 SAS, an Airbus subsidiary. These points were admitted by Ian Whitehall following specific questions raised by the judges.
The judges also wondered why Eolia was asking the recently appointed directors to explain a transaction which had taken place 8 years before their appointment, while the Eolia team was part of the original transactions.
The judges asked whether Eolia, represented by Ian Whitehall which admitted being in direct and frequent contacts with Airbus to obtain a settlement from Airbus, had not instead asked the question to Airbus directly.
Last, Ian Whitehall had also been a director of Airbus Group Limited in England previously.