News Yesterday
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The supervisory board of Ajax has immediately suspended general manager and chairman Alex Kroes “due to very strong indications of insider trading”. The Amsterdam club says it plans to “permanently end” the collaboration.
The decision is, according to reports Ajaxtaken after the supervisory board learned that Kroes purchased more than 17,000 Ajax shares a week before the publication of his intended appointment on August 2, 2023.
Non-competition clause
Kroes could only start at Ajax on March 1 because his previous employer AZ had a non-competition clause. That was reduced to six months. He succeeded Edwin van der Sar in Amsterdam.
Kroes was previously in the picture at Ajax, after the forced departure of director of football affairs Marc Overmars due to undesirable behavior. He graduated in business economics and is co-founder of the Sports Entertainment Group, an international firm of agents in football and other sports. He was a major shareholder in Go Ahead Eagles and has worked at AZ since December 2022 as director of International Football Strategy.
Not compatible
“We are very unpleasantly surprised that this is now happening to Ajax, because this is very bad for the club and for everyone who cares about the club,” says supervisory board chairman Michael van Praag in a press release. “The actions of Alex Kroes are not compatible with what we stand for with Ajax. The moment at which he bought the shares means that he traded with insider information. A listed company cannot tolerate such a violation of the law, especially if it concerns the CEO. After After careful deliberation, the supervisory board came to the conclusion that Alex’s position as a board member of Ajax is not tenable. I think it is important to add that the technical policy will be continued with the people we have for this and on the path that Ajax had already started with Alex.”
Kroes paid around 190,000 euros for his shares at the time, based on the stock price at the end of July. After that, the stock price fell sharply and, apart from a small peak in November, did not rise above the July level. His duties will be taken over by his fellow directors for the time being.
Van Praag will temporarily assist the management as delegated supervisory director. An extraordinary general meeting of shareholders (EGM) will follow shortly to hear about the proposed dismissal. The supervisory board will then make a decision on dismissal.
AFM
Kroes will submit his controversial purchase of Ajax shares to the regulator AFM for an independent opinion. “My moral compass says that I cannot simply accept this decision of the supervisory board,” he said in a statement on LinkedIn.
The AFM does not want to say anything about Kroes’ request to investigate the purchase of his shares in the club. “We cannot comment on individual investigations due to supervisory confidentiality,” a spokeswoman for the regulator said. Ajax already reported a share package of Kroes to the AFM on March 15, as can be read in the AFM’s notification register.
Kroes states that he bought Ajax shares “in bits and pieces” between April 6, 2022 and July 26, 2023, increasing to 42,500 shares. He bought more than 17,000 shares shortly before his appointment on August 2, 2023. “At that time I had not yet agreed with Ajax, but – because of my own intentions – I had a good feeling about it,” he says. He thought it was “a positive signal” to the club and to shareholders.
“I believe that you radiate confidence to your fellow shareholders and stakeholders if you buy shares yourself and therefore also run financial risks yourself. Skin in the game“as they say,” says Kroes.
The suspended director states that he has “never made a secret” of the fact that he has shares in the club. “In fact, I pointed out to Ajax in August last year that I had this package and that I would like to hear how to deal with it, because I had not yet mastered the specific rules,” he says. “That question has not been answered to date.”
Supervisory Board
According to Kroes, the supervisory board has had months to “find something about the fact that I purchased these shares”. He says he was not confronted about it. No questions were asked either.
Kroes’ share trading had already emerged in a proper background check, says the Dutch Association of Supervisory Directors and Directors (NCD). Yet, according to NCD chairman Paul Geraeds, the question is to what extent Ajax can be blamed. “I cannot imagine that the supervisory board would have suspended him if they knew this.”
The big question is who tells the truth, says Geraeds. But it is still unclear what signal Kroes wanted to send with the share transaction. “If you want to radiate confidence in the club, as Kroes says, you should buy those shares after you have joined, not the day before.”
According to the NCD chairman, the issue shows how important transparency is in business. “Certainly for a listed company. Ajax is in a period in which the club’s supervisory board has made some unfortunate decisions. Apart from the legal aspects, this is also about moral leadership from the director.”
VEB response
Investor organization VEB finds it “very stupid” that Kroes bought Ajax shares in the week before it became known that he would become the new director of the football club, regardless of whether it was insider trading or not.
“I don’t think Kroes deliberately tried to ride the stock, it was just stupid,” said VEB director and former AFM director Gerben Everts.
According to Everts, whether this involved insider trading and therefore a criminal offense depends on the concreteness of the information that Kroes had at the time of the purchase. “For example, if Kroes knew about a proposed decision on the day of the transaction, then it is concrete.”
THE
According to RTL Nieuws, Kroes may also have violated the rules of his then employer AZ with the purchase of Ajax shares. As a director of the Alkmaar football club, he was prohibited from purchasing shares of another professional football organization. The club says it is surprised by the news about the matter.
The takeover of Kroes by Ajax previously encountered objections at AZ, where he joined the management in November 2022. His contract with the Alkmaar club included a one-year non-competition clause.
The clubs could not reach an agreement, after which AZ reached an agreement with Kroes. For a symbolic amount of 50,000 euros, intended for the Alkmaar Zaanstreek Foundation, he was allowed to start in Amsterdam six months earlier.
Source: ANP
