Boeing admits guilt to the allegations of fraud

According to a court document on Sunday, Boeing has consented to resolve a U.S. Justice Department (DOJ) investigation into two fatal 737 MAX accidents by entering a guilty plea to a criminal fraud conspiracy charge and paying a $243.6 million fine.

With the consent of the judge, this plea agreement would make Boeing a convicted criminal for the five-month period of 2018 and 2019 crashes in Ethiopia and Indonesia that claimed 346 lives.

The relatives of the victims have immediately criticised the settlement, calling for a trial and harsher financial consequences for Boeing. The DOJ's decision to charge Boeing is a further blow to the company's already dire situation. A separate in-flight mishap in January served as a reminder of the company's persistent problems with safety and quality.

A guilty plea may make it more difficult for Boeing to get lucrative federal contracts from organisations like NASA and the US Defence Department, though the business might be able to get waivers. In May, the Justice Department concluded that Boeing had broken a 2021 settlement linked to the crashes, opening the company up to legal action.

But the plea agreement spares Boeing from an acrimonious trial that may have raised further questions about the company's pre-crash choices. This agreement may also help Boeing go forward with its objectives, which include approving its proposed acquisition of Spirit AeroSystems and installing a new CEO.

As per the agreement, Boeing pledged to invest a minimum of $455 million for improving safety and compliance initiatives throughout the following three years. In addition, the families of those slain in the MAX accidents will have a meeting with the board of Boeing.

Boeing will be placed on probation for the duration of the three-year period, with an independent monitor keeping an eye on the company's compliance and publicly reporting any yearly progress reports.

The victims' relatives pushed the Justice Department to seek fines of up to $25 billion last month.

According to the DOJ's court filing, the formal plea deal between the DOJ and Boeing is now being finalised and will likely be submitted in federal court in Texas by July 19.

(Sources: investing.com, reuters.com)