Jim Miller, the chief executive of the US Foodservice unit of Dutch retail group Ahold, has finally resigned after revelations of accounting fraud at the business rocked the European group earlier this year.
While Miller has not been implicated in the scandal itself, he has finally been forced to carry the can for the $880 million (€764m) fraud. The two executives at the centre of the affair - vice-president of marketing Mark Kaiser and vice-president of purchasing Tim Lee - were dismissed earlier this month, and Ahold has warned that other dismissals could follow as the investigation into the affair continues.
Miller finally decided to fall on his sword after the revelation last week that the extent of the fraud was far greater than originally thought: Ahold had originally estimated the impact at around $500 million. Robert Tobin, former chief executive of Ahold USA, will head US Foodservice until a replacement is appointed.
But Miller's resignation has not relieved the pressure on the Ahold board. According to the Financial Times newspaper, Anders Moberg, acting chief executive at Ahold, yesterday appealed to shareholders to give him between 120-150 days to conduct a strategic review of the company.
The paper reports that questions were also raised about how the accounting fraud could have gone undetected for so long. The issue of promotional allowances offered by suppliers - the issue at the heart of the fraud - was apparently raised at the company's 2001 audit, without being acted upon, and one angry shareholder is reported to have claimed that US Foodservice's profits in 2002 could have been overstated by as much as 90 per cent.
The Ahold board was also grilled as to whether the due diligence carried out before the retailer's purchase of US Foodservice in early 2000 was thorough enough. The company has also been under pressure to reform its corporate governance procedures amid allegations that it has been secretive and unhelpful in dealings with the media and other bodies over the accounting scandal.