Three major US food companies have said that they may face civil action from the US Securities & Exchange Commission over allegations that some of their staff helped US food distributor Fleming inflate its revenue.
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US food giant Kraft, dairy giant Dean Foods and PepsiCo snacks subsidiary Frito-Lay all said they had received notices from the SEC informing them of the possible action.
Kraft said the notice from the SEC alleged that company officials signed documents requested by Fleming that the now-bankrupt food distributor used to accelerate its revenue recognition. Frito-Lay and Dean Foods said they received similar notices.
The three companies said the notices did not contain any allegations regarding their own accounting for their transactions with Fleming and that they intend to cooperate fully with the SEC.
Fleming, which filed for bankruptcy in April after losing its main customer, US discount retailer Kmart Corp, is being investigated by the SEC for its vendor trade practices, accounting for sales transactions and presentation of earnings.
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By GlobalData
