Royal Ahold will not be fined by the Securities & Exchange Commission for accounting fraud at its U.S. Foodservice division.
The SEC filed enforcement actions last week against four Ahold executives for allegedly inflating U.S. Foodservice’s trade-promotion allowances to overstate 2000-2002 net sales by $30 billion.
But the SEC won’t fine Ahold because of its “extensive cooperation with the Commission’s investigation,” the SEC said. Ahold reported the misconduct and is conducting its own investigation, not just at U.S. Foodservice but also at 17 operating companies.
Ahold consented to the SEC’s entry of judgment, which prohibits the company from breaking antifraud and securities laws. Ahold didn’t admit or deny the allegations. Three of the four executives, all foreign nationals, consented to sanctions: Former CEO Cees van der Hoeven and former CFO A. Michiel Meurs consented to permanent injunctions barring them from being officers and directors (without admitting or denying guilt). Roland Fahlin, a former member of Ahold’s supervisory board and audit committee, consented to a cease-and-desist order that identifies his role in violating securities laws (without admitting or denying guilt).
The SEC will litigate its case against former VP Jan Andreae, who allegedly signed fraudulent documents for ICA, Ahold’s Scandinavian joint venture.
The Dutch Public Prosecutor’s Office continues its criminal investigation in the Netherlands and may charge the executives. The Prosecutor’s Office asked the SEC not to seek penalties from the executives because that would risk double-jeopardy under Dutch law.
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