World Online punters vent fury at Brinkmanship

The World Online saga has reached a new phase: the wrath of Dutch investors in the less-than-successful floatation of the Rotterdam-based World Online last month has turned from being directed against former chairman Nina Brink to the ABN AMRO bank's role (and that of Goldman Sachs). Now that the first 30 days of trading are over - during this period, the banks had special responsibilities for managing the shares and say they were prevented from commenting - a better picture is emerging of what happened, and aggrieved shareholders have a blood lust. Dutch accounts accuse AEX of "showing its teeth but not biting", although there is no mistaking the ferocity of the punters who have lost out - including World Online staff who took up loans from the company to buy shares. Possibly fearing a market collapse, the banks wanted the float to go ahead quickly. However, AEX, the Amsterdam exchanges, threatened to stop the 2.9 billion euro float because of Brink's pre-selling of most of her holding to San Francisco-based Baystar Capital. As a result, ABN AMRO threatened an injunction against AEX. In typical Dutch fashion, a compromise was arranged after AEX had seen more documents, which showed that Baystar had not agreed to a lock-up agreement to keep its shares for a time, as is usual in such situations - and indeed, was an aggressive seller from day one. The initial price of World Online was 43 euros, and although they rose briefly on the first day to 51, they ended the day back at 43, and have now sunk to around 13 euros. In December, Brink sold her shares for $60 million, valuing them at just 6 euros each, with $35 million going to her Swiss bank account. AEX wanted Brink to lock up the shares transferred to Baystar, and $25 million being her participation in Baystar. She agreed to an extra lockup arrangement on shares she still controlled, and this was put in the prospectus. As a result of an apparent deficiency in Dutch law, it was not necessary for Brink's shareholding to be disclosed in the prospectus. ABN AMRO chairman J Kalff was in denial, saying he was sure of the "correctness and care in the prospectus", although shareholders are claiming that European law requires disclosure. Kalff did not help when he added that he "didn't regret anything" and that "next time we'll do it in exactly the same way". Aggrieved shareholders are claiming that they were mislead because the prospectus said she "transferred" instead of "sold" her shares to Baystar, but this argument appears to be rather feeble. There must be some doubt as to whether any of those making the claim actually read the document: they were in it in the expectation that the float would be initially successful, and wanted a quick euro. Well, like the euro's recent performance, their bet failed. Brink is a Dutch tax exile living in Brasschaat, Belgium, a country favoured by many of the Dutch super-rich. Brink has hardly advanced the cause of female IT executives, but nor has ABN AMRO helped the reputation of Dutch banking. ®