The US Securities and Exchange Commission (SEC) has announced that it has reached a final settlement with Dutch retailer Ahold.
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The SEC’s complaint alleged that, as a result of the fraudulent inflation of promotional allowances at Ahold subsidiary US Foodservice, the improper consolidation of joint ventures through fraudulent side letters, and other accounting errors and irregularities, Ahold’s original SEC filings for at least fiscal years 2000 to 2002 were materially false and misleading.
“Ahold has agreed to settle the Commission’s action, without admitting or denying the allegations in the complaint, by consenting to the entry of a judgment permanently enjoining the company from violating the antifraud and other provisions of the securities laws,” the SEC said.
The SEC added that it did not seek a financial penalty from Ahold because of, among other things, the company’s extensive cooperation with the SEC’s investigation. Ahold self-reported the misconduct and conducted an extensive internal investigation. The retailer also expanded its internal investigation on its own initiative beyond the fraud at US Foodservice and the improper joint venture accounting to analyse accounting practices and internal controls at seventeen operating companies.
Ahold said it would continue to cooperate fully with the SEC and other authorities, adding that the settlement completely resolves the SEC’s investigation of Ahold and its various operating companies, including its US Foodservice subsidiary.
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By GlobalData“Ahold has worked very hard over the past two years to improve its systems and controls and implement other remedial measures to prevent any recurrence of these unfortunate events,” said Ahold’s chief corporate governance counsel, Peter Wakkie.
“The conclusion of the SEC’s investigation into Ahold represents another significant step for Ahold’s “Road to Recovery” and continuing our efforts to regain and maintain the confidence and trust of our shareholders, customers and employees,” he added.
