Ex-Ahold executives charged with fraud

28th July 2004, Comments 0 comments

28 July 2004 , AMSTERDAM — US Justice authorities have formally laid fraud charges against four former executives of Dutch retailer Ahold in relation to the massive accounting scandal that emerged last year.

28 July 2004

AMSTERDAM — US Justice authorities have formally laid fraud charges against four former executives of Dutch retailer Ahold in relation to the massive accounting scandal that emerged last year.

The former executives of Ahold subsidiary US Foodservice are accused of conspiring to inflate earnings by USD 800 million (EUR 664 million) by reporting fake rebates from suppliers.

It emerged early last year that Ahold had overstated earnings by more than USD 1 billion, costing the jobs of the company's chief executive and chief financial officer. Shares dropped by some 60 percent in value, costing investors USD 6 billion.

The former US Foodservice CFO, Michael Resnick, and former executive vice president for purchasing, Mark Kaiser, have been charged with conspiracy, securities fraud and making false filings, CNN reported.

It is expected they will surrender to the FBI on Wednesday, Dutch public news service NOS reported.

Prosecutors also said former executive vice president Timothy Lee and former vice president William Carter pleaded guilty in a plea agreement within the past week.

All four suspects were sacked or resigned after the scandal hit the headlines last year. Investigations continue into the actions of a fifth former US Foodservice executive, Jim Miller.

Prosecutors have also charged a former supplier to US Foodservice, Peter Marion, with insider trading. It is alleged he bought and sold company stock based on advance knowledge of its merger with Ahold in 2000.

And in making similar allegations, the US Securities and Exchange Commission also filed civil charges on Tuesday against the five men.

The Wall St Journal reported on Tuesday that the developments underscore that US prosecutors and securities regulators are aggressively seeking to expand their investigation into the food industry.

Ahold is one of the world's largest food retailers, along with Wal-Mart Stores Inc. and Carrefour SA of France.

[Copyright Expatica News 2004]

Subject: Dutch news

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