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UPDATE 1-KPN drops new CEO Leroy amid investigation into share sale

* Leroy had been set to start at KPN Dec.1

* Belgian authorities looking into Proximus share sale

* Uncertainty not in share holders' interests-supervisory board

* Shareholders meeting to vote on appointment canceled (Adds details from statement, background; Recasts lede)

AMSTERDAM, Sept 30 (Reuters) - Dutch telecoms firm KPN will no longer appoint Dominique Leroy as its next chief executive due to her facing an investigation in Belgium over a share sale, the company said on Monday.

Leroy was due to start her new role on Dec. 1. She is under investigation for her sale of shares in Proximus, the company she was leaving.

KPN "regrets to announce that Mrs. Dominique Leroy is no longer a candidate," it said in a statement.

"The duration of the procedures which concern Mrs. Leroy by the authorities in Belgium is unclear and unpredictable. The Supervisory Board of KPN considers these uncertainties around timing not in the interest of KPN and its stakeholders," it said.

An extra shareholders meeting on Oct.28, at which her appointment was to be voted on, was canceled.

Belgian police said 10 days ago they had searched her home and office as part of a probe by Belgium's stock market watchdog FSMA into Leroy's sale of Proximus shares worth 285,000 euros ($315,000) on Aug. 1, her first transaction in three years. When Leroy's departure was announced on Sept. 5, Proximus shares fell by 2.5%.

KPN's supervisory board said the decision had been difficult due to Leroy's positive track record. "We wish her all the best," it said in a statement.

KPN has been striving to recover from years of weak sales and profit growth. In July, it said its core earnings would grow "slightly" for the first time in more than five years.

KPN's previous CEO, Maximo Ibarra, announced his departure in June to lead Sky Italia, after just over a year on the job. (Reporting by Anthony Deutsch; Editing by Muralikumar Anantharaman and Raissa Kasolowsky)

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