Accounting & Tax

Ahold Settles Class Action for $1.1 Billion

The SEC did not seek a penalty from the supermarket giant, in part because of the company's extensive cooperation with the investigation.
Stephen TaubNovember 28, 2005

Netherlands-based supermarket giant Royal Ahold NV has agreed to pay $1.1 billion to settle a class-action shareholder lawsuit in a U.S. court stemming from its 2003 accounting scandal.

The agreement, pending before the U.S. District Court for the District of Maryland, covers Ahold, its subsidiaries and affiliates, individual defendants, and underwriters. The lead plaintiffs were the Public Employees’ Retirement Association of Colorado and Generic Trading of Philadelphia LLC. Ahold asserted that U.S. and non-U.S. holders of qualifying shares will be treated equally under the agreement, which covers all common shares purchased between July 30, 1999, and February 23, 2003.

In October 2004 the Securities and Exchange Commission settled fraud and other charges against Ahold and three former executives: chief executive officer and chairman Cees van der Hoeven, chief financial officer Michiel Meurs, and executive vice president and board member Jan Andreae. The SEC also charged Roland Fahlin, a former member of Ahold’s supervisory board and audit committee, with causing violations of the reporting, books and records, and internal controls provisions of the securities laws.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

The commission did not seek a penalty from Ahold, in part because of the company’s extensive cooperation with the investigation.

Meanwhile, several former executives of Ahold’s wholly owned subsidiary U.S. Foodservice Inc. are dealing with criminal charges. Former chief financial officer Michael Resnick and former chief marketing officer Mark Kaiser are awaiting trial, according to the Associated Press, and former vice presidents Timothy Lee and William Carter have pleaded guilty.