$500m accounts errors threaten buyers' future

13 March 2003
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13 March 2003 | Robin Parker

Purchasers face an uncertain future at Dutch retailer Ahold after the company admitted accountancy errors worth half a billion dollars.

The crisis-hit group has suspended senior purchasing and marketing management executives in its US Foodservice division, which was found to have overstated last year's earnings by more than $500 million.

The move came as Cees van der Hoeven, Ahold's president and chief executive officer, and Michael Meurs, its chief financial officer, resigned after questions were raised over accounts regarding Ahold's Argentine subsidiary Disco.

The firm's auditors have commissioned a full investigation of "significant" accounting irregularities in US Foodservice's income, including pre-payment amounts relating to its promotional allowance programmes.

The unit has been forced to restate its financial statements for fiscal year 2001 and the first three quarters of 2002.

Ahold refused to name those suspended, as the exact terms of the probe remain confidential, but it stressed the US division was the only area of purchasing to have yet suspended staff.

Retailers including Tesco, the UK's biggest supermarket chain, are reported to be preparing takeover bids for the group.

SMmar2003

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