Ahold challenged on timing
Supermarket operator informed regulators before shareholders
March 3 2003
Ahold has moved to fend of suggestions that it delayed telling shareholder about the accounting problems that have rocked the Netherlands-based supermarket giant.
The Financial Times reports that group made key disclosures to securities regulators several days before publicly announcing last week that it had uncovered irregularities related to supplier payments in its US Foodservice business. The report also refers to an anonymous letter sent to Dutch newspapers on February 21, before the company launched an internal investigation.
Regulators and investors will want to know if any Ahold executives sold shares in the company before the company went public a week ago. Ahold has lost around two-thirds of its share value since the announcement. The letter received by two Dutch newspapers detailing the accounting irregularities could form part of an insider trading probe by the authorities.
Ahold informed the Authority for Financial Markets (AFM), Dutch regulators and the Securities and Exchange Commission that it was investigating accounting irregularities on February 20, four days before it went public. An Ahold spokesperson told the FT: “At no time was there a request from any regulator to make an announcement.”
However, the AFM said Ahold should be aware of European securities laws which say a company should disclose accounting problems to shareholders as soon as possible.
Meanwhile, UK supermarket operator Tesco is reported to be looking at buying some of Ahold’s non-Dutch interests, which may be sold to head off the financial crisis. Prime targets for Tesco would include Ahold’s 115 stores in Poland and 173 in the Czech Republic, as well as Asian joint ventures mainly based in Thailand and Malaysia.
