Further evidence of fraud at Ahold
scandal, has completed its internal probe - and discovered yet more
irregularities.
Ahold, the Dutch retail group at the centre of a major accounting scandal, has completed its internal probe - and discovered yet more irregularities.
The investigation, which covered Ahold, its subsidiaries and its joint ventures, revealed "intentional accounting irregularities" of around €73 million related to improper purchase accounting, and the company said that it might be required to reduce pre-tax earnings by this additional amount.
Investigations have already unveiled accounting irregularities of around $856 million (€741m) - slightly less than the $880 million originally reported - at the group's US Foodservice arm, as well as $29 million at the Tops Markets supermarket group in the US.
Ahold has also been forced to reduce its pre-tax earnings for 2002 by around €8 million because of irregularities at its South American unit Disco, where the investigation identified "questionable transactions, including inaccurate documentation, and control weaknesses".
In total, some €970 million of accounting irregularities were discovered by the auditors. These may lead to adjustments to the 2002 figures and restatements in one or more prior years, Ahold said.
The retailer has also established a task force consisting of members of Ahold management and outside advisors which will address the various accounting practices and internal control weaknesses raised or confirmed by the investigations. The task force will also be responsible for implementing changes to these practices, which Ahold said should be in place by the end of 2003.
The old Ahold management has already suffered as a result of the investigations, with senior executives at the parent company (including CEO Cees van der Hoeven), US Foodservice, Tops and Disco all being replaced.
Although an internal legal investigation in still ongoing at US Foodservice, Ahold said that it was now in a position to complete the audit of its 2002 financial results. Under its €2.65 billion credit facility, Ahold is required to deliver its audited consolidated 2002 financial statements by 15 August to the syndicate of the banks involved.
The company was originally due to report its 2002 results on 30 June.
