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Air France-KLM acquisition criticised by Dutch court

written by Sandy Milne | May 22, 2020
A file image of a KLM Royal Dutch Airlines Boeing 777. (KLM)
A KLM Royal Dutch Airlines Boeing 777. (KLM)
The Dutch government’s acquisition of a 14 per cent stake in Air France-KLM has been criticised by the Netherlands Court of Audit on Wednesday.

In particular, the Court slammed a government decision to purchase the shares without first informing Parliament, calling the move “irregular”.

In February 2019, the government purchased €744 million worth of shares in Air France-KLM, looking to up its stake in the company and bring Dutch influence to bear on the KLM subsidiary. It maintains that announcing its intention to do so publicly would have violated insider trading laws.

In turn, the Court of Audit rejected this position, stating that the country’s constitution requires ministers to “inform Parliament of such transactions in advance”.

“In our opinion, the transaction was therefore irregular,” the Court said.

Finance Minister Wopke Hoekstra said that he faced a “dilemma” in applying these laws.

“In consultation with Parliament, new agreements have been made about a new way of handling disclosures of confidential market-sensitive information,” he said. “These have been satisfactorily used recently in preparing the support measures for KLM.”

Though the court’s findings do not carry penalties or require the transaction to be reversed, it does make a series of recommendations which will bear on future transactions.


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