Leroy loses both jobs after insider trading allegations

Dominique Leroy loses both jobs after insider trading allegations

30 September 2019 | Alan Burkitt-Gray

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Netherlands operator KPN has withdrawn the appointment of Dominique Leroy as its next CEO.

She (pictured) had been CEO of Belgian operator Proximus until just over a week ago, but then she was suddenly enmeshed in an insider trading investigation after she sold €285,000 worth of shares in her old company, a few weeks before she left.

This is only 30% of the €935,000 a year she was due to get at KPN, but the timing has undermined her appointment – especially as KPN did not know how long the investigation would take.

“The duration of the procedures which concern Mrs Leroy by the authorities in Belgium is unclear and unpredictable,” said KPN this morning.

Belgian police searched Leroy’s house after the allegations of insider trading emerged. It is likely that they might lead to a lengthy investigation, even if the police eventually decided to take no action.

It seems this was connected to her sale of Proximus shares on 1 August. Leroy said in a statement, available on the Proximus website and flagged as an “urgent press release”, that when she sold the shares “I had not decided to leave Proximus”.

She adds in the statement: “I was in discussion about the renewal of my contract with Proximus and had some conversations with several external parties, amongst which KPN.”

She says 1 August was the first time she could trade shares, thanks to a closed period that had begun on 22 November.

Leroy wrote: “I understand that with hindsight the timing can create the perception that I did this exactly prior and because of my departure.” She said: “This is surely not the reason for my sale of shares,” but she recognised this could “be understood in such way by the external world. I regret that this perception has been created, this is not in line with my values where integrity and transparency are very high.”

At the time of the announcement in early September, but before the controversy about the share sale had emerged, Proximus thanked Leroy “for her leadership and efforts in very challenging market conditions during her mandate of almost six years”. The company said her Fit for Growth strategy meant Proximus “could again show positive results for the last four years, both in top- and bottom line”.

KPN said today that its supervisory board “considers these uncertainties around timing not in the interest of KPN and its stakeholders. For this reason, the supervisory board has taken the decision to withdraw the intended appointment of Mrs Leroy in the position of CEO of KPN.”

Duco Sickinghe, chairman of KPN’s supervisory board, said: “This was a difficult decision for the supervisory board given the track record of Mrs Dominique Leroy as a very accomplished executive. However, the uncertainty around timing results in a situation, which the supervisory board considers not in the interest of KPN. We wish her all the best.”

KPN had hoped Leroy would replace Maximo Ibarra, who is leaving the company today to run Sky Italia. She had been due to take up her position on 1 December. She left Proximus on 20 September, so has nowhere to return. Meanwhile, KPN has resumed its search.