- The Washington Times - Tuesday, July 1, 2003

AMSTERDAM (AP) — The Dutch grocer and food distributor Ahold, struck earlier this year by a bookkeeping scandal at its U.S. operations, said yesterday an internal probe had unearthed an additional $84 million in accounting irregularities.

The latest figures take the total value of improperly booked profit in 2001-02 to about $1.1 billion, Ahold said.

The food supplier did not specify for which year earnings would have to be adjusted or where the latest irregularities had taken place, but said it may have to reduce its pretax profit by $73 million.

At the same time, the Netherlands-based company said it would reduce its earlier estimate of accounting irregularities at its Columbia, Md.-based U.S. Foodservice unit to $856 million from the previously disclosed $880 million.



That reduction is reflected in the higher total announced yesterday.

Last week, Ahold said the leading executive of its U.S. subsidiary Tops Markets was resigning, the latest in a string of managers to leave since it revealed the accounting problems in February.

Ahold Chief Executive Officer Cees van der Hoeven and Chief Financial Officer Michael Meurs resigned immediately, followed by U.S. Foodservice Chief Executive Officer Jim Miller and several other Foodservice executives in May.

Ahold said in a statement yesterday the new irregularities were related to “improper purchase accounting,” the cause of earlier financial misstatements.

The U.S. units improperly booked discounts on bulk purchases that inflated earnings.

The total also includes $29 million in problematic accounting at Tops Markets and $9.2 million at its Argentine unit Disco SA.

While internal forensic audits are now done, an internal legal investigation at U.S. Foodservice is continuing, as are probes by the U.S. Securities and Exchange Commission and Dutch market regulators.

More than half of Ahold’s sales are in the United States, where it owns various grocery chains, such as Stop & Shop, Giant Carlisle, Giant Landover and BI-LO.

Ahold has been struggling to keep up liquidity and must deliver its audited consolidated 2002 financial statements by Aug. 15.

On Monday, it handed over audited 2002 results for its Stop & Shop unit.

After losing about two-thirds of their value in the wake of the scandal, Ahold’s shares jumped 6.1 percent yesterday, apparently supported by relief that the internal probe had been completed.

Ahold’s new chief executive, Anders Moberg, a former executive at Swedish furniture retailer Ikea, will present his new strategy for the company around October.

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