Exec Says Ahold Knew of Accounting Issues
Sunday March 9, 9:23 pm ET
LONDON (Reuters) - A former top executive at global retailer Ahold's (Amsterdam:AHLN.AS - News) unit, U.S. Foodservice, told headquarters about potential accounting problems at the subsidiary as early as 2001, the Financial Times reported on Monday, citing a former top employee.
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Dutch Ahold, the world's third-largest supermarkets group, is being investigated by U.S. authorities after it revealed it had overstated profits since 2001 by more than $500 million.
The newspaper, citing the executive who asked not to be identified, reported that Maryland-based U.S. Foodservice's Chief Financial Officer Ernie Smith left the company just three months after being given the job, because he was supposedly uncomfortable with the division's accounting.
Smith's concerns were not properly dealt with, the executive said, according to the Financial Times.
Smith declined to comment, the newspaper said.
The company would not say whether Ahold executives were told about problems at the U.S. unit before March, the newspaper reported.
Ahold representatives were not immediately available for comment.
The incident involving Smith was not the first time Ahold was alerted to potential issues at U.S. Foodservice, the newspaper said.
A former Ahold executive said internal auditors were unsure about U.S. Foodservice's accounts before the $3.6 billion takeover in 2000, it reported.
Advisers to the deal disputed this, the newspaper said.
Ahold's chief executive and chief financial officer resigned amid the scandal, which has also prompted talk of a break-up or sale of the company.
Vultures circling around the dying carcass...
French retailer Carrefour (Paris:CARR.PA - News) said last week it would be interested in any Ahold units that might come up for sale, while U.S. private equity firm Kohlberg Kravis Roberts & Co (KKR) is also said to be interested. |
