4 March 2004

AMSTERDAM — Dutch retailer giant Ahold has sacked 39 managers since accountancy fraud was discovered last year. Most job losses took place in the US and 60 others escaped with disciplinary measures or warnings.

CEO Anders Moberg said during a shareholders meeting in The Hague on Wednesday that fraud was "the consequence of inadequate internal checks and offences by a handful of individuals and not large-scale corruption through the entire company".

Moberg's speech was designed to convince shareholders that a call for new investigations into accountancy fraud is not in the company's best interests, news agency ANP reported.

The association of shareholders VEB has demanded an official court investigation of Ahold, which owns the Albert Heijn supermarket group and Etos store chains. Legal action has also been started to nullify its annual accounts from 1998 onwards in order to thoroughly re-examine the company's balance sheets.

Moberg said he could imagine that shareholders would have questions due to recent media reports — especially by newspaper NRC Handelsblad — about the scandal, but urged understanding for the fact that the company did not wish to be caught up in speculation and should await the outcome of inquiries.

Ahold is under investigation by the US Securities Exchange Commission (SEC), the US Attorney for the Southern District of New York and the Dutch government. Civil action suits are also being prepared in the US.

Board member Peter Wakkie said that Ahold is demanding that former US Foodservice chief James Miller repay his bonuses. Ahold's EUR 1 billion in accounting irregularities mainly occurred at its subsidiary US Foodservice.

Miller has started legal action to retain the bonuses, while Wakkie said Ahold board members in 2000 and 2001 — when company profits were highly inflated — have repaid 25 percent of their bonuses, public news service NOS reported.

But Moberg also said that rumours about the involvement of Ahold company chiefs in the accounting irregularities were not evidence of wrongdoing.

"These people have rights and we respect them. We endorse the age-old principle that someone is innocent until proven guilty," he said.

[Copyright Expatica News 2004]

Subject: Dutch news