Secret Dutch purchase of Air France-KLM shares 'irregular': Court

A KLM aircraft in front of an Air France airplane at Schiphol Airport in Amsterdam. July 11, 2017
A KLM aircraft in front of an Air France airplane at Schiphol Airport in Amsterdam. July 11, 2017tupungatoDepositPhotosDeposit Photos

The Dutch government's purchase of a 14 percent stake in Air France-KLM last year was made unlawfully, the Court of Audit ruled on Wednesday. The court asserted that the government had not considered the parliament while making the 744.4 million euro purchase in February 2019, and that the purchase was abnormal.

"The Senate was not informed at all. Parliament’s right to authorize the budget was therefore infringed, what, in the court’s opinion, constitutes an irregularity," the watchdog said in a statement.

The court went on to recommend that the government abide by the rules going forward. "The Court recommends that future repetition should be avoided by means of a clearer interpretation of Section 4.7 of the Government Accounts Act and further agreements between the minister and parliament," they said.

Finance Minister Wopke Hoekstra defended the government's original decision, arguing that, if purchase had indeed been made public, it would have facilitated insider trading while upping the final cost when the deal was closed.

Nevertheless, Hoekstra pointed out on Wednesday that while he disagreed that the purchase constituted an irregularity under one of the sections of the Government Accounts Act, he would be willing to go along with the court's recommendation anyway.

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

The court responded to Hoekstra's statement, questioning the Minister's reading of the relevant laws. "In view of how the act is worded, the Court is surprised that the minister is uncertain about the need to inform the Senate in good time."