THE NETHERLANDS - Dutch pension giants ABP and PGGM have exercised their shareholder might against Van der Moolen, in refusing to approve the specialist market maker's 2003 accounts and voting against a series of agenda items presented at the AGM.
At this moment, there are still so many investigations against Van der Moolen in the United States and they all have to do with 2003, so we don't think that it's appropriate to approve their annual accounts, when there is still so much uncertainty, said Ellen Habermehl, PGGM spokesperson.
The two funds have a combined 5% stake in the company, and harbour ongoing concerns that Van der Moolen could be subject to further SEC fines.
Van der Moolen was fined $57.67m by the SEC at the end of March over improper trading, along with four other market makers. In a joint investigation, the NYSE and SEC found that, between 1999 and2003, the five firms violated federal securities laws and exchange rules by executing orders for their dealer accounts ahead of executable public customer or agency orders.
The SEC concluded in its investigation that through this conduct, the firms improperly profited from trading opportunities and disadvantaged customer orders.
PGGM and ABP also voted against new issuance of Van der Moolen shares at the AGM, and against the firm paying dividends on preferential shares, which both funds hold in their portfolios.
In view of the company's precarious position, which is partly attributable to the costs that may result from the legal action highlighted by the auditors, it would not seem to be in the company's interests at present to pay a preference dividend of e2.9m, said PGGM in a statement.
As well as needing to comply with the Sarbanes-Oxley Act in the US, as a Dutch company, Van de Moolen must also adher to the Dutch Tabaksblat code of corporate governance, which came into effect in January this year.
Habermehl confirmed that PGGM does not use Van der Moolen as a market maker, and has no client relations with the firm.
Van der Moolen, which incurred net losses of e15.9m in 2003 is to report its first quarter 2004 results on Thursday.
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