Expatica news

Stockholders drag Ahold to court

7 January 2004

AMSTERDAM — The Dutch association of Stockholders VEB has taken Dutch retailer Ahold to court and is demanding that the scandal-hit multinational revise its annual accountancy accounts from 1998 to 2002.

But Ahold — which was plunged into controversy when it revealed massive accounting irregularities at subsidiary US Foodservice at the start of last year —  labelled the demand unfounded and said it would strongly defend itself.

The VEB lodged the legal proceedings with the business chamber of the Amsterdam Appeals Court in an attempt to determine who was responsible for the recent fraud scandal, an NOS news report said.

Ahold stocks lost two-thirds of their value when news of the scandal broke last year and the VEB wants to investigate whether
Ahold is guilty of mismanagement. It is also keen to examine in the long-run if compensation payments to shareholders are possible.

The VEB claims that Ahold directors and commissioners did not try hard enough to recoup the financial damages of the fraud scandal — totaling almost EUR 1 billion — from, for example, company accountants and US Foodservice suppliers.

It has urged Ahold shareholders to side with the legal bid. The request was made to those who bought shares between 1 January 2000 and 24 February 2003, the date that Ahold announced the accountancy fraud.

Ahold has since revised its 2000 and 2001 annual accounts and discovered more than 700 irregularities. The 2002 account — to the fury of the VEB — was finally published late last year after several delays.

VEB director Peter Paul de Vries claims that Ahold only adjusted its profit figures when revising its national accounts, but claimed it remained unclear who was responsible for the irregularities. The role of the board of directors also remains unknown, he said.

De Vries said Ahold’s claim that several US Foodservice staff members were responsible for the accounting fraud is not plausible. Nor has he excluded the possibility that Ahold’s accountant, Deloitte & Touche, also played a role in the scandal, news agency ANP reported.

Meanwhile, new Ahold chief Anders Moberg recently unveiled a new strategy to help restore the retailer to financial prosperity. Ahold has issued EUR 3 billion in new shares to partially pay off its EUR 11 billion in debt.

The company also hopes to sell off parts of its business activities for EUR 2.5 billion.

[Copyright Expatica News 2003]

Subject: Dutch news + Ahold