The stock market regulator FSMA has begun an investigation into a trade in Proximus shares carried out on behalf of the company’s CEO, Dominique Leroy, who announced her departure this week.
At the same time, unions concerned over the progress of negotiations on a new restructuring package have called for her to step down immediately rather than wait until December.
Leroy sold 10,840 shares in Proximus on 1 August for 285,342.40 euros, the FSMA said. It was her first transaction in three years.
The investigation is a routine affair. Any transaction by a company executive has to be notified to the regulator once the total in a year goes over 5,000 euros. The FSMA makes such transactions public, as it did in this case on 6 August.
The sale or purchase is routinely investigated when it concerns a leading executive, whose movements are considered sensitive, meaning likely to affect the share price. The question in this case is whether Leroy had any indication at the time of the sale that she would be announcing her intention not to renew her mandate as chief executive.
In theory – and until further notice this is only a theory – Leroy could have sold her shares when the price was high, knowing that her later decision would depress the share price. Since her announcement this week, announced while the stock market was closed, Proximus shares lost 2.5% of their value, dropping to last place in the Bel20 index.
That was only to be expected. The only question the FSMA will be asking is, what did she know on 1 August?
Meanwhile her decision to quit Proximus to move to take over as CEO of KPN in the Netherlands has been what one newspaper called a “semi-surprise”. Proximus is half of a duopoly in Belgium in some telecoms fields, and a monopoly in others, and is doing well. But since the matter of the salary of her predecessor, the late Didier Bellens, the salaries of senior executives of state-owned companies are capped; no executive may earn more than the prime minister.
KPN, on the other hand, is a wholly private company, and Leroy’s basic salary there will be
935,000 euros, compared to 523,000 euros with Proximus.
At home, three unions representing Proximus staff have called for the CEO to depart immediately instead of three months from now, arguing her choice of a new job with a competitor is a “breach of trust”.
“From the moment that she opted for a potential competitor, is has become very difficult to have confidence in her” one representative told De Standaard, pointing out that at one time, KPN had eyed Proximus as a possible takeover target.
“We’re afraid of what could happen in the future,” said another. “The CEO knows the company from A to Z, including the strategy for the future.”
A third explained: “That’s all confidential information,” he told the paper. “We’re worried that she will take it with her.”