Investors’ club urges Michael van Praag to resign from Ajax | The Gooi

Michael van Praag during a round table discussion.© ANP

Amsterdam

The Association of Securities Owners (VEB) is calling for the resignation of chairman of the board Michael van Praag at Ajax. “In his position, I would leave the honor to myself and grant Ajax that they can really make a new beginning,” said VEB director and former director at the regulator AFM, Gerben Everts, in front of the NOS camera.

The broadcaster reported on Friday that Van Praag also made a mistake with shares in Ajax by not registering his shares with the Netherlands Authority for the Financial Markets (AFM). Earlier this week, the supervisory board, led by Van Praag, suspended general manager Alex Kroes because he had purchased thousands of shares just before his appointment was announced at Ajax. Kroes would therefore have been guilty of insider trading.

Also read: Alex Kroes has succumbed to his own overconfidence. In that respect he was a great fit for Ajax | commentary

“It is not a lot of shares, but it is about the principle,” Everts said to NOS about Van Praag’s misstep. “And he also expressed the principle very clearly to Mr Kroes. At this level you simply play as a listed company in the Champions League. And then you just have to comply with the laws and regulations.”

According to Everts, Van Praag should have registered his shares in Ajax last autumn. Van Praag’s failure to do so could also result in a fine. Everts states that the AFM can theoretically impose a fine of half a million euros for this.

A spokeswoman for the AFM emphasizes that the regulator can take various measures in the event of a violation of the rules. For example, parties that make a mistake may first receive a warning letter, but also an order subject to penalty. The AFM does not comment on individual cases.

“In general terms, directors and supervisory directors must report their share ownership in their own and affiliated issuing company to the AFM.”

Van Praag registered shares more than three months late

According to Van Praag, there was an “administrative omission of a fact that was fully known to the market.” He has been chairman of the supervisory board of Ajax for about four months and should have reported his shares to the AFM within two weeks.

Van Praag’s mistake comes at an unfortunate time. The supervisory board of Ajax, led by Van Praag, suspended general manager Alex Kroes last Tuesday because he was allegedly guilty of insider trading in the Ajax share. A week before his appointment, Kroes purchased another 17,000 Ajax shares. He said he did not do this to make a profit. “I thought it was a positive signal to radiate confidence in the club and to shareholders,” he responded.

The cases of Kroes and Van Praag stand alone and cannot be compared. Kroes has 42,500 Ajax shares. Insider trading in shares is a criminal offense and can even lead to a prison sentence. Van Praag could be fined for his mistake.

Van Praag was very surprised on Tuesday that Kroes did not know the rules of listed companies. “He said it wasn’t that bad and that he didn’t know all the rules,” he said about Kroes. “But of course you have to know the rules if you are so active on the stock exchange and you become CEO of a listed company. He was only allowed to start on March 15 and had more than six months to read up. Insider trading is a crime and we cannot tolerate it. We cannot sell that to our stakeholders.”

Van Praag mistake ‘extremely unfortunate’

It is “particularly unfortunate” that Michael van Praag failed to report his shares in the club to the Netherlands Authority for the Financial Markets (AFM) for months. Earlier this week he was remarkably resolute about the fate of suspended Ajax director Alex Kroes, says chairman of the Dutch Association of Commissioners and Directors (NCD) Paul Geraeds.

According to Geraeds, Van Praag’s resolute judgment in the media was striking, because a suspension is actually an intermediate phase in which you await the findings of an investigation. “If you have that harsh tone, which is your right, it goes both ways. So primarily for yourself. That is now getting in each other’s way,” he says about the issue currently surrounding Van Praag. “It is not disastrous, but it is extremely unfortunate.”

According to Geraeds, it is not only important for directors and supervisory directors of companies to know the rules down to the last detail. It also matters which tone of management you follow and are consistent in doing so.

“As a supervisor you have to know the rules of the game very well. But it also matters how you whistle. Do you let play continue a lot, or do you blow the whistle for everything?” Geraeds draws a comparison with referees. “Van Praag was a very strict whistler this week and now he is on the playing field himself. Then it is not surprising that you are viewed more critically.”

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