Former Ahold boss goes on trial
6 March 2006, AMSTERDAM — Four former managers of Dutch retail giant Ahold go on trial on Monday in relation to what has been described as one of Europe's largest financial scandals.
6 March 2006
AMSTERDAM — Four former managers of Dutch retail giant Ahold go on trial on Monday in relation to what has been described as one of Europe's largest financial scandals.
The accused men, including ex-Chief Executive Officer Cees van der Hoeven and former Chief Financial Officer Michiel Meurs, deny any wrongdoing in the affair that almost brought Ahold's retail empire crashing down in 2003.
The four men are accused of improperly booking sales from four subsidiaries in Scandinavia and Brazil. Ahold claimed it had a 50 percent and controlling stake in the companies, which would have been sufficient to justify the inclusion of the entirety of their profits in Ahold's results.
Prosecutors allege the accused men made secret agreements that Ahold would own 50 percent of the companies but without control. At issue are letters between the executives in which they allegedly discussed the issue of control with the other stakeholders of the subsidiaries.
This trial only covers part of the overall scandal as the men reached a settlement with the US Securities and Exchange Commission in relation to the major over-statement of profit by Ahold's U.S. Foodservice subsidiary. The defendant in that action admitted no guilt but agreed to a lifetime ban from holding office in publicly listed companies.
Van der Hoeven and Meurs resigned in February 2003 after the company made the fraud known, and Ahold shares lost two-thirds of their value overnight. The company, which is not a party in the fraud case in Amsterdam, has worked hard in the intervening years to restore market confidence.
The court is expected to deliver a verdict in the case on 22 May.
[Copyright Expatica News + ANP 2006]
Subject: Dutch news