Ajax suspends new CEO Alex Kroes over insider trading allegations

By Louis Goss

Amsterdam soccer club AFC Ajax has suspended its new CEO over claims he took part in insider trading by purchasing 17,000 shares in the sports team the week before his appointment was officially announced.

Ajax said in a statement that it has suspended Alex Kroes with immediate effect just two weeks after he took up the job, after it sought out external legal advice which indicated the new CEO and chairman of the board had engaged in insider trading.

The Dutch team, which continues to be the Netherlands' only publicly listed soccer club following its initial public offering in 1998, said it also intends to terminate Kroes' contract permanently as it said the entrepreneur's actions had made his position "untenable."

Shares in AFC Ajax N.V. (NL:AJAX) listed on the Euronext Amsterdam stock exchange increased 1% on Tuesday having lost 6% of their value over the previous 12 months. Ajax shares are down 6% since Kroes' appointment was first officially announced on August 2 2023.

In a statement responding to Ajax' decision, Kroes said he bought shares in Ajax with "good intentions" to show his commitment to the club between April 6, 2023 and July 26, 2023, before informing Ajax's board of his holdings in August 2023.

Kroes said there are still questions to be asked about whether news of his appointment as Ajax CEO counts as "inside information" as he noted that he is yet to make any profits from his holdings in the football club. "There is certainly no 'quick win'," Kroes said.

Ajax said in a statement that its board would be taking over Kroes' duties as the club said it now intends to host an extraordinary general meeting with shareholders to make a final decision on the dismissal.

"Alex Kroes's actions are not in line with what Ajax stands for," Ajax chairman Michael van Praag said. "The timing of his share purchase indicates insider trading. Such a violation of the law cannot be tolerated by a publicly listed company, especially when it involves the CEO."

"We are deeply dismayed that this has occurred at Ajax, as it is highly detrimental to the club and everyone who holds it dear to them. Alex Kroes's actions are not in line with what Ajax stands for," Praag added.

Kroes' suspension comes as the latest in a series of blows suffered by Ajax in recent months, following its decision to fire manager Maurice Steijn and coach Alfred Schreuder just months into both their tenures after the team experienced a series of poor results.

In September, Ajax' match against rivals Feyenoord was called off mid-game after fans threw fireworks onto the pitch at the Johan Cruyff Arena in the Amsterdam suburbs.

Kroes, who was born in the Dutch city of Weesp near Ajax's home Johan Cruyff Arena in 1974, became a major player in the world of soccer after founding football talent agency Sports Entertainment Group in 2000 with childhood friend Kees Vos.

-Louis Goss

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

04-02-24 0649ET

Copyright (c) 2024 Dow Jones & Company, Inc.