Austria to sue Airbus over Eurofighter deal

The first Austrian military jet fighter "Eurofighter Typhoon" lands on the military airport in the small Styrian village of Zeltweg, Austria, in this July 12, 2007 file photo. (Reuters)
Updated 16 February 2017
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Austria to sue Airbus over Eurofighter deal

VIENNA: Austria said Thursday that it will sue European aerospace giant Airbus over a $2-billion sale of Eurofighter jets that has long been plagued by allegations of kickbacks.
A government probe concluded that the Airbus and Eurofigher consortium had “deliberately misled the Austrian Republic on the real price, delivery capabilities and its equipment” of the deal signed in 2003.
“Austria would have never decided to buy the Eurofighter jets in 2003 without the fraudulent deception by Airbus and Eurofighter,” Defense Minister Hans Peter Doskozil said.
EU member Austria is seeking damages of up to €1.1 billion ($1.16 million) for its largest-ever defense deal, worth around €2 billion.
According to the “Task Force Eurojet” report presented in Vienna, Eurofighter knew that it would not be able to meet the delivery deadline of the 15 planes.
The five-year-investigation also found that Austria had been overcharged for costs that allegedly included backhanders.
“The two companies never informed Austria that the 2-billion-euro deal would include 183.4 million euros of legal but also criminal fees,” Doskozil told reporters.
Ahead of the report’s release, Airbus said in a statement sent to AFP that it was not aware of the Austrian findings and had received “no details” regarding the lawsuit.
However it said that Airbus has been “cooperating with the authorities in recent years, for example through its own enquiries.”
In late January, Airbus had already agreed to pay tens of millions of euros in additional taxes over an allegedly shady 90-million-euro payment linked to the Austrian Eurofighter contract.
Austrian and German authorities launched the current corruption probe into Airbus, then called EADS, to investigate whether officials had been paid millions of euros through advisory firms to secure the contract.
Prosecutors in Munich are set to publish their preliminary findings later this year.
The Eurofighter deal was first announced in 2000 by Austria’s then conservative-run government despite fierce opposition from its far-right coalition partner and the Social Democrats.
The government had initially ordered 24 jets but later dropped the number to 18 and then to 15 because of budgetary constraints.
The purchase of the military fighter jets also stirred public unease in non-NATO neutral Austria.
Shortly after the contract was signed, allegations started to circulate that politicians and others involved in the deal were receiving kickbacks.
A probe was set up in 2007 to look into possible bribes, but came to no firm conclusion.
The Eurofighter Typhoon is a major prestige product for the European defense industry. The first prototypes were made in 1989.
The four founding nations in the consortium — Germany, Spain, Britain and Italy — all use the aircraft in their own air forces.
Austria saw the first sale outside of the four consortium members, and since July 2007 the 15 Austrian jets have clocked up more than 5,000 flying hours, according to the consortium.
In 2006 Saudi Arabia agreed to purchase 72 Eurofighter Typhoons. Other contracts have been signed with Oman and Kuwait.
As well as Airbus Defense and Space, representing Germany and Spain, the consortium includes British group BAE Systems and Italian firm Leonardo.
Eurofighters were used in combat missions in Libya in 2011.


Indonesia’s Go-Jek close to profits in all segments

Updated 18 August 2018
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Indonesia’s Go-Jek close to profits in all segments

  • Go-Jek is Indonesia's first billio-dollar startup
  • Ride haling app evolves into online payment platform

JAKARTA: Go-Jek, Indonesia’s first billion-dollar startup, is “extremely close” to achieving profitability in all its segments, except transportation, its founder and CEO Nadiem Makarim told Reuters.

Launched in 2011 in Jakarta, Go-Jek — a play on the local word for motorbike taxis — has evolved from a ride-hailing service to a one-stop app allowing clients in Southeast Asia’s largest economy to make online payments and order everything from food, groceries to massages.

“We’re seeing enormous online to offline traction for all of our businesses and are close to being profitable, outside of transportation,” said the 34-year old CEO.
The startup is expected to be fully profitable “probably” within the next few years, Makarim added.

Already a market leader in Indonesia, where it processes more than 100 million transactions for its 20-25 million monthly users, Go-Jek is now looking to expand in Southeast Asia.

Ride hailing services in Southeast Asia are expected to surge to $20.1 billion in gross merchandise value by 2025 from $5.1 billion in 2017, according to a Google-Temasek report.

Go-Jek said in May it would invest $500 million to enter Vietnam, Singapore, Thailand and the Philippines, after Uber struck a deal to sell its Southeast Asian operations to Grab — the bigger player in the region.

Go-Jek is seeing strong funding interest from its backers as it targets an aggressive expansion, Makarim said.

“Since its Aug. 1 launch, the app has already grabbed 15 percent of market share in Ho Chi Minh,” Makarim said. The firm this week opened recruitment for motorcycle drivers in Thailand.

The startup expects anti-monopoly concerns swirling around the Grab-Uber deal, which Singapore said had substantially hurt competition, to help clear a path for its expansion.

“We’re bringing back choice. The Singapore government is particularly eager to bring back competition,” Makarim said, adding that the order of overseas rollouts had not been set.

Go-Jek’s offshore push comes at a time when Singapore-based Grab is stepping up funding to expand in Indonesia and transform itself into a consumer technology company, starting with a partnership with online grocer HappyFresh.

“Mimicking Go-Jek’s strategy is the highest form of flattery,” laughed Makarim.

Grab told Reuters in a statement, “The super app strategy has been around for a while now and no Southeast Asian player can claim to have pioneered it.” The company also said Grab has not lost market share in Ho Chi Minh since August, but declined to provide market share data.

Makarim believes Go-Jek’s understanding of food merchants will give it an edge over Grab, which counts investors such as Chinese ride-hailing firm Didi Chuxing and Japan’s SoftBank Group Corp. among its backers.

Makarim, who sees food delivery as Go-Jek’s core business, said he was not concerned about funding, without giving details.

Go-Jek was reported in June as being in talks to raise $1.5 billion in a new funding round and was valued at about $5 billion in a prior fundraising, sources have told Reuters. The firm had said in March it was considering a domestic IPO.

Makarim noted Go-Jek’s backers were sharing both capital and expertise. The company is collaborating with Alphabet Inc’s Google on platform mobility, Tencent on payments strategy, JD.com on logistics operations, and Meituan Dianping on merchant transactions and deliveries.

Go-Jek has set up a venture capital arm, Go-Ventures, to invest in startups in Southeast Asia “with strategic importance to our business,” the CEO said.