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Reuters

Heads roll at Dutch retailer


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AMSTERDAM, The Netherlands (Reuters) -- Dutch retailer Ahold, one of the biggest food retailers in the world, said on Monday its chief executive and chief financial officer would resign after accounting irregularities were found at its U.S. Foodservice unit.

Ahold, which issued two profit warnings last year, said its 2002 net profit would be significantly lower than expected and that it would have to restate earnings for 2000, 2001 and last year's interim results.

Ahold, which reported its first net loss in almost 30 years in the second quarter, also said it had been investigating the legality of certain transactions at its Argentine subsidiary Disco. It said these investigations were ongoing.

The group said it had secured 3.1 billion euros ($3.36 billion) in new funding to support its liquidity position.

Ahold's shares plunged 27 percent to a record low of 7.10 euros on Instinet after the statement, which was issued before the Amsterdam bourse opened.

"Recently, during the fiscal year 2002 year-end audit for U.S. Foodservice, significant accounting irregularities were discovered in the recognition of income, including prepayment amounts related to U.S. Foodservice's promotional allowance programs," Ahold said in a statement.

The company said it believed operating earnings for 2001 and 2002 could have been overstated by more than $500 million, with most of this occurring last year.

"The Supervisory Board of Ahold announces that, in view of the above, Ahold President and Chief Executive Officer Cees van der Hoeven and Chief Financial Officer Michael Meurs will resign," the company said in a statement.

Supervisory Board Chairman Henny de Ruiter has been appointed to oversee their duties.

Ahold's U.S. Foodservice is the second-largest food distributor to restaurants, hotels, healthcare institutions and sports facilities in the United States after Sysco Corp (SYY).

The Dutch group has taken a knock from difficult trading conditions and its enormous exposure to the world's biggest economy, making it vulnerable to any downturn there.

Disclosure concerns also hit the shares after the group published a surprise trading update in October and amid concerns that some sales numbers had leaked out prematurely.



Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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