Denis Fercoq, former chief financial officer of Safran subsidiary Sagem Défense Sécurité, is adding to the company’s woes by lodging a libel complaint against outgoing group chief executive Jean-Paul Béchat, according to reports in the French press.

Fercoq has lodged the complaint in response to a statement from Safran last week announcing that a fraud investigation into the defence security division would be launched and noting “unexplained accounting entries” in the files of its former chief financial officer.

The complaint is the latest in a series of setbacks for the French manufacturer, which was formed last year with the merger of aero engine maker Snecma and electronics specialist Sagem.

Last week Safran announced that Béchat, and Mario Colaiacovo, chairman of the supervisory board were to leave, following months of infighting between the top management of the formerly separate businesses.

The defence security division’s former chief executive Jacques Paccard, who left in November before the accounting irregularities came to light, has already lodged a complaint.

Auditors KPMG are now conducting an independent investigation into the accounting irregularities at the defence security division which Safran has said could leave a €100 million hole in the company’s 2006 profits. Safran has also reduced margin forecasts from as much as 6% to 4% for the year.

Safran expects 2006 results at its aerospace propulsion and aircraft equipment divisions to be in line with its forecast objectives. But the defence security division is facing a negative impact from possible corrections following the investigation into the accounting irregularities, as well as revised margins at the completion of some long-term contracts.

Meanwhile the group’s communication business is suffering from a downturn in mobile phone business and the consequent depreciation of certain intangible assets.

Safran was not immediately available for comment.

Source: FlightGlobal.com

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