Netherlands-based Royal Ahold NV has obtained a settlement with the United States Securities and Exchange Commission, concluding a 20-month probe into accounting fraud charges.
The SEC decided against fining Ahold because of the firm’s “exceptional” cooperation in the investigation, said Thomas Newkirk, an SEC official in Washington. Former Chief Executive Officer Cees van der Hoeven and former Chief Financial Officer Michiel Meurs also settled with the SEC by consenting to stricter sanctions. Ahold is subject to harsher penalties for any future US violations.
In February 2003, Ahold admitted overstating three years of earnings and fired van der Hoeven and Meurs, which caused its stock to plummet by two-thirds in one day. The firm cited irregularities at its US Foodservice unit, spurring a probe by regulators and a class-action lawsuit.
The SEC will pursue its case against ex-Ahold board member Jan Andreae. According to the agency Andreae took part in the fraud by `”knowingly or recklessly concealing” matters of control concerning Swedish joint venture ICA AB.
A settlement was reached by the SEC with another former board member, Roland Fahlin. The agency charged him with failing to investigate after being warned of possible improper accounting for the ICA joint venture. Though he neither admitted nor denied the SEC allegations, he agreed not to break US securities laws in the future.
