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Former CEO and CFO receive only fines and suspended sentences; Dutch court says that the food giant's $1 billion accounting scandal should not be compared with the woes of Enron and Parmalat.
Stephen Taub, CFO.com | US
May 22, 2006
Three former executives of Dutch food giant Royal Ahold were convicted Monday for their roles in the company's $1 billion accounting scandal, according to published reports.
Former chief executive officer Cees van der Hoeven and former chief financial officer Michiel Meurs each received a nine-month suspended sentence and a $288,000 fine, reported the Associated Press; former European business director Jan Andreae received a four-month suspended sentence and a fine of $150,000. Roland Fahlin, the former chairman of Ahold's accounting commission, was acquitted.
According to the AP, Judge Frans Bauduin stated that the former executives "have damaged the good reputation of Dutch companies in general and Ahold in particular" and "betrayed the confidence that shareholders ... placed in them." The Dutch court reportedly stressed, however, that the Ahold case should not be compared to the scandals at Enron and Parmalat since the former executives acted not to enrich themselves but only to boost the company's finances.
Prosecutors had reportedly sought sentences of up to 20 months, including prison time, for Van der Hoeven and Meurs.
According to the AP, Van der Hoeven and Meurs signed documents that falsely claimed Ahold had full control over subsidiaries in Sweden and Latin America; these results were then incorporated into the company's overall results. They also were found to have knowledge of secret side letters — withheld from accountants — denying the company's control over the subsidiaries, the AP added.