Van der Moolen asks for creditor protection
The Dutch stockbroker Van der Moolen – once a prestigious name on the Amsterdam stock exchange – has filed for suspension of payments.
After sustaining a loss of almost 9 million euros in the first six months of 2009, the Van der Moolen's supervisory board said on Monday that the firm could no longer meet its immediate payment obligations.
Van der Moolen has been temporarily managed by the supervisory board since the last CEO, Richard den Drijver, left three weeks ago. The firm has been without a CFO since October 2006.
Van der Moolen traded shares and other financial products both on its own account and on behalf of other investors and investment banks. Until the beginning of this year it employed 237 people, but several traders have left in the past few weeks.
Van der Moolen shares have dropped 76 percent in the past 12 months, giving it a market value of 52 million euros. Trading in Van der Moolen shares has been suspended on the Amsterdam stock exchange, although they are still listed among firms under deferred payment.
According to the Dutch association of stockholders, which was very critical during Van der Moolen's last shareholders meeting in May, and wrote a worried letter to the supervisory board in July, the firm's current troubles are the result of serious mismanagement.
The rise - and in the way also the fall - of Van der Moolen is closely linked to the person of Hans Kroon, who was not available for comment on Monday. The now 66-year old Kroon started on the Amsterdam exchange as a 17-year-old bringing coffee to traders. In 1975 he bought into Van der Moolen and, together with Arie van Os, became a leading figure in the firm.
Under Kroon and Van Os, Van der Moolen was the first to start evening trading on the Amsterdam stock exchange, and after buying up several competitors, became the biggest so-called "hoekman" – the equivalent of a specialist on the New York Stock Exchange – controlling one third of the Amsterdam trade.
When Van der Moolen went public in 1986, it made Kroon and Van Os millionaires. Van Os left shortly afterwards, having lost interest, and Kroon went on to oversee the international expansion of Van der Moolen. It became the foruth biggest market maker on the New York Stock Exchange in 2001.
In the mid-nineties, Kroon sold his 16 percent stake in Van der Moolen for 50 million guilders and stepped down as CEO. His public criticism of his successors' policy also led to his resignation from the supervisory board in 2002.
Kroon got along better with Richard den Drijver, who was appointed CEO in 2006, and in May of this year the annual shareholders' meeting almost unanimously voted in favour of Kroon's return to the management of Van der Moolen.
But last month Kroon announced that he had changed his mind, "for personal reasons". Two days later, Den Drijver resigned after disappointing results for the second quarter were announced.
In recent years Van der Moolen has been plagued with unfavourable market conditions, shrinking US activities and court cases alleging illegal practises on the New York Stock Exchange. It denied misleading investors, but it settled out of court for nearly 58 million dollars.
Van der Moolen put the strain on liquidity down to high operating costs, disappointing returns, an expensive move, and, in retrospect, last year's 30 million euros stock repurchase.
The company made a 14.5 million euros profit in 2008, but it has already lost nearly 8.7 million in the first six months of this year.
The management is now considering selling off parts of the business and starting again in a slimmed-down form. An extraordinary shareholders meeting has been called for the second half of September.