The Board of Air Berlin PLC dismissed the allegations of insider trading made by the public prosecutor`s office in Stuttgart. The office has commenced preliminary investigations with respect to two members of the Board and three division man-agers as well as a sixth, as yet unnamed accused.

On Tuesday (19 May), police officials and employees of the Federal Financial Supervisory Author-ity (FFSA) searched offices and homes of the accused and confiscated documents. The above-referenced individuals are accused of purchasing Air Berlin shares in a total amount of 1.5 million Euros prior to the publication of an ad-hoc announcement with respect to the acquisition of the airline, dba. It is maintained that this was
sufficient to have a significant positive influence on the share price.

The Board of Air Berlin, Joachim Hunold, dismisses the accusation of the prosecutor`s office as unfounded. Whether and to what extent Air Berlin`s share price would increase following the publication of the dba acquisition was more than unknown. At the beginning of June 2006, I purchased shares simply because at this point the lock up period imposed by the stock market regulations came to an end and I wanted to send a positive signal to the market. This share purchase was properly notified to the FFSA by Air Berlin and published in the internet. The FFSA already investigated the purchases in early autumn 2006 and raised no objections. And because I have not yet sold any shares, I have not realized any profit.

Hunold emphasized that Air Berlin is fully cooperating with the investigating authorities and is interested in a speedy resolution of the matter. Although it is correct that on May 26, 2006 a so-called confidentiality agreement between Air Berlin and dba was concluded, following which a legal and financial review of a potential purchase of dba commenced, a purchase of dba was considered highly unlikely at this point.

Only after the share purchases on July 15, did Air Berlin receive the approval from the Board to commence negotiations with respect to the purchase. Two days later a Letter of Intent was signed. It was at this point that the respective employees of Air Berlin became subject to the insider rules. The dba purchase was publically announced on August 17, 2006.

Up until the eve of conclusion, the Deal was uncertain, Hunold concluded.