Conclusion AEX: KLM In Contravention Listing Rules

In July 1999 Amsterdam Exchanges instituted an investigation into an alleged violation by KLM of articles 26 and 28h of the Listing and Issuing Rules, involving an incident in which KLM disseminated announcements via its own intranet entitled "prognosis of KLM's operating results: disappointing results call for measures". The announcements originated with the Air Service and Cabin Personnel Service divisions at KLM. The investigation of Amsterdam Exchanges has now been completed. On the basis of the information available, Amsterdam Exchanges has reached the conclusion that KLM's actions were in contravention of articles 26 and 28h of the Listing and Issuing Rules of Amsterdam Exchanges. Article 28h of the Listing and Issuing Rules stipulates that issuers must immediately publish information concerning any fact or event affecting the company which is expected to have a significant effect on the price of its shares. Although KLM has indicated that the information disseminated via the intranet should be viewed exclusively in the light of the adjustment of internal budgets, these announcements unavoidably give the impression - in light of the qualifying terms used by KLM itself - that an unexpected, highly negative turn in the company's operating results called for drastic measures. Furthermore, the information disseminated via the intranet indicated that insights into the unfavourable developments that KLM apparently faced had changed so dramatically since the prognoses published in KLM's annual announcement on 19 May 1999 that KLM should have realised that this event qualifies as price-sensitive as defined in article 28h of the Listing and Issuing Rules. Given that the information disseminated via KLM's intranet was of a price-sensitive nature as defined in article 28h of the Listing and Issuing Rules, its widespread circulation among KLM's employees, some of whom are assumed to be KLM shareholders, implies that shareholders were not given equal treatment as defined in article 26 of the Listing and Issuing Rules.