Dutch shareholders' association investigates Baan's business activities

Dutch shareholders' association VEB is investigating troubled enterprise resource planning (ERP) supplier Baan to ascertain whether it misled its shareholders.

The move follows litigation by the company?s US shareholders, which alleged that some of its executives made misleading statements that artificially inflated its stock price.

But VEB is now also understood to be gathering as much information as possible about 'everything to do with Baan' and its activities over the last year.

Although Peter-Paul de Vries, VEB?s chairman tried to play down the investigation by describing it as 'routine', and something that rarely led to prosecution, such a move does nothing to help Baan re-build its battered financial credibility.

In October, the company reported quarterly losses of $31.7 million and, shortly afterwards, announced 1,200 job cuts, mostly in sales and marketing. The move did little to stem the tide of adverse criticism by analysts, however.

Bruce Richardson, vice president of research strategy at analysts AMR Research, said that Bull, one of Baan?s key partners, was unhappy with recent presentations given to it by the supplier.

"Bull's Paris office told me they were completely disgusted," he said, adding that the vendor was also incredulous about suggestions that Jan Baan, the firm?s co-founder and former chairman, should come back.

"He was the man responsible for all the bad news," Richardson said.

Baan is also understood to be on the hunt for a new chief financial officer (CFO).

"QAD recently told me Baan approached its CFO. It looks like (present incumbent) Klaas Wagenaar is on his way out," Richardson claimed.

Dennis Keeling, chief executive of the Business and Accounting Software Developers Association (Basda) added: "Wagenaar was the one who fed the Baan brothers with the expansion plans."

But it was these very expansion plans, analysts say, that left Baan with the huge job of integrating technology from its various partnership deals and its various acquisitions into one coherent company with one coherent product set.

Sheila Gibson, Baan's European marketing director, refused to comment on Wagenaar or his plans for the future, however, prefering to dwell on Baan's failure to explain what it was doing to resolve its current difficulties.

"We've not done a good job communicating the financial message, but the management is committed to seeing this through. I've got the cleanest marketing operation ever," she said. Such a statement would appear to contrast with Richardson?s view that Tom Tinsley, Baan?s current chief executive, is "uncomfortable with operational roles. He's already tried to leave once."

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