- The Washington Times - Monday, May 26, 2003

AMSTERDAM, Netherlands (AP) — Dutch food retailer Royal Ahold NV said yesterday it has found an additional $29 million in accounting errors in American operations.

It will also miss a June 30 deadline to finish auditing its books for 2002.

Ahold has been struggling to achieve accurate accounts since the company’s February announcement that Maryland-based U.S. Foodservice had overstated profits. An internal investigation released earlier this month put the overstatements at $880 million from 2000 to 2002.

The company said yesterday that other investigations have since found the extra $29 million in irregularities, mainly at its Tops markets subsidiary in the United States.

More than half Ahold’s sales are in the United States, where it owns various grocery chains, including Tops, Stop & Shop, Bruno’s and U.S. Foodservice, which delivers food to hotels, schools and restaurants.

Ahold said that some investigations into other units had taken longer than expected, and that its accountant, Deloitte & Touche, was four to six weeks behind schedule as a result.

Ahold pledged to have the remaining investigations finished within two weeks, adding that its banks have agreed to a new deadline of Aug. 15 for the 2002 books.

“Ahold will determine what steps must be taken to strengthen internal controls, to eliminate any improper accounting practices and to take whatever remedial actions are deemed necessary” to reform its business, the company said.

On Amsterdam’s stock exchange, Ahold shares fell 1.6 percent to close at $7.39.

Pascale Nachtergaele, an analyst at Delta Lloyd Bank, called the additional accounting problems disappointing but said the sum was insignificant given the company’s size.

After Ahold’s announcement Feb. 24, its chief executive and chief financial officer resigned and the company’s stock lost two-thirds of its value in a single trading session.

Shares have staged a modest recovery as investors’ confidence grew that the accounting irregularities were mostly limited to Foodservice and that the company was not in danger of bankruptcy.

In the wake of the scandal, Ahold’s banks had agreed to keep a $915 million credit line open until the June 30 deadline, but Ahold said yesterday that they would extend that deadline. Ahold also forced out Jim Miller, U.S. Foodservice’s chief executive.

The Securities and Exchange commission and Dutch regulators are also investigating Ahold’s accounting practices.

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