Ahold bosses may face Dutch jail

By Anita Awbi

- Last updated on GMT

Related tags: Corporate governance, Board of directors, Fraud, Ahold

Guilty or not guilty? The fate of four former Royal Ahold bosses
hangs in the balance today, as a Dutch court must deliver the
verdict on 2003's largest retail fraud case.

Former chief executive Cees van der Hoeven, and three other senior management figures, await the court's decision on fraud charges relating to the Dutch supermarket's overstatement of profits from 1998 to 2002.

They stand accused of fiddling the books to show fictitious profits amounting to €1bn, deceiving Deloitte accountants with false information, and claiming joint venture sales in Scandinavia and South America as its own.

The prosecution has indicated van der Hoeven and "accomplice" Michiel Meurs, former finance chief, should face up to 20 months imprisonment for their involvement in the scandal.

Former executive board member Jan Andreae, and supervisory board member Roland Fahlin, also face custodial sentences. Lawyers are recommending up to one year suspended sentences for both men.

But the defendants, who resigned at the height of the 2003 scandal, deny any wrongdoing. Their defence claim the charges are the result of a three-year witch hunt.

The verdict is expected later today.

Reports in the Dutch national press indicate the former bosses intend to appeal if they are given custodial sentences, while the prosecution have confirmed they will accept nothing less.

In February 2003 Ahold announced it had inflated earnings by at least $500m (€391m) at its wholly-owned US food service subsidiary. The firm also informed investors it improperly consolidated revenues from joint ventures. Together, the fraud represented over €1bn in false profit statements and spanned operations on both sides of the Atlantic.

Since then, the disgraced company has implemented a "Road to Recovery" programme, spending billions on shareholder remuneration and new corporate governance schemes to restore investor confidence.

Former executives involved in the US scandal face trial on American soil later this year.

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