Former Ahold execs face fraud charges
US Foodservice focus of SEC investigation
Four former Ahold executives face fraud charges in the US in relation to the financial crisis that engulfed the retail giant last year.
Prosecutors have filed fraud charges against four former senior executives at the US Foodservice business. The level of supplier payments made to the business was at the centre of the $700m accounting scandal which prompted a series of senior resignations at Netherlands-based Ahold, as well as a restructuring which has seen a number of its businesses sold.
The securities and exchange commission has brought the charges of securities fraud against fomer US Foodservice’s chief financial officer, Michael Resnick, its former chief marketing officer Mark Kaiser and its former purchasing vice-presidents Timothy Lee and William Carter.
The SEC’s deputy director of enforcement, Linda Chatman Thomsen, said the four had gone to “extraordinary lengths to perpetuate the illusion of stellar financial performance”, adding that the fraud “created the appearance that they had met their budgets and allowed them to line their own pockets with unearned bonuses.”
Lawrence Benjamin, the new CEO of US Foodservice, said: “US Foodservice has been actively cooperating with the authorities in their investigations. We will continue to cooperate with the government in its efforts to hold accountable those individuals who may have violated the law and abused our trust.”
Benjamin said that changes have been particularly focused on its organisation and control procedures, including the installation of a new executive leadership team, and substantial improvements in the company’s financial systems and controls, as well as its financial organisation, to strengthen financial monitoring and reporting.
He added: “Throughout all of these changes, our more than 29,000 hard-working associates across the United States have focused on ensuring that our customers continue to receive the high-quality products and services they have come to expect.”
Ahold corporate executive board member and chief corporate governance counsel Peter Wakkie, said: “US Foodservice has taken numerous actions over the course of the past year and a half to ensure this conduct does not occur again. Ahold has also put in place a series of measures that will give the company the ability to more closely monitor the financial activities of its operating companies.”
