- The Washington Times - Tuesday, May 13, 2003

AMSTERDAM (AP) — The global supermarket retailer Ahold forced out the head of its beleaguered American distributor, U.S. Foodservice, yesterday, holding him accountable for overstating profit by hundreds of million of dollars.

Ahold’s supervisory board said it accepted the resignation of Jim Miller, who was chief executive of Foodservice since 1997, after an independent report that the company had overstated profits by $880 million over three years.

Robert G. Tobin, former CEO of Stop & Shop, was named as the interim head of U.S. Foodservice, which is based in Columbia, Md. Mr. Tobin also previously served as head of Ahold USA.

Ahold stunned the business world in February when it announced that U.S. Foodservice had wrongfully accounted for vendor rebates to boost profits, in the first major accounting scandal in Europe since a spate of similar scandals were uncovered in the United States.

U.S. Foodservice, the second-largest food distributor in the United States after Sysco Corp., caters food and meals to schools, hospitals, restaurants, the Army and prisons.

Two Foodservice procurement managers were suspended immediately after the irregularities were discovered and later dismissed, but Mr. Miller survived the initial fallout until he was ousted yesterday.

“The supervisory board has taken this decision in light of the results of the forensic accounting work conducted by PricewaterhouseCoopers,” Ahold said in a statement.

Investigations were continuing of the company by Dutch and U.S. authorities including the Securities and Exchange Commission.

Together with problems in Ahold’s Argentina operations and European joint ventures, the affair in the U.S. subsidiary forced the resignation of Ahold chief executive Cees van der Hoeven and chief financial officer Michiel Meurs.

After the February announcement, Ahold’s stock plunged from nearly $11.50 to a low of $2.75 in mid-March. Early in 2002 shares were trading at $36.80.

Shares have shown a modest recovery as the new CEO, Anders Moberg, formerly of the Swedish furniture retailer IKEA, reassured investors that Ahold had identified the accounting problems and would meet a June 30 deadline set by lenders to complete audits.

But in trading yesterday on the New York Stock Exchange, Ahold’s U.S. shares fell 32 cents, or 4.6 percent, to close at $6.66.

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