A Dutch court sentenced the former chief executive and chief financial officer of supermarket group Ahold to suspended jail terms on Monday over one of Europe's largest financial scandals. The Ahold accounting scandal in 2003 pushed one of the world's largest retailers to the brink of collapse.
The executives were found guilty of deceiving accountants to boost group sales by improperly consolidating the results of several retail subsidiaries and adding sales of joint ventures in Scandinavia and South America to Ahold's accounts.
The court handed former chief executive Cees van der Hoeven and former chief financial officer Michiel Meurs nine-month suspended sentences and fined each 225,000 euros ($286,800). Prosecutors had demanded 20-month sentences, part of them suspended, for Van der Hoeven and Meurs.
In the United States, accounting fraud carries much tougher sentences. Former Enron executives face possible prison terms of up to 30 years and former WorldCom chief executive Bernard Ebbers was sentenced to 25 years, but is free pending an appeal.
Judge Frans Bauduin noted that laws were different in the Netherlands and said that unlike cases such as Enron, there had been no question of personal enrichment at Ahold. "The sentences are to show disapproval of fraudulent behaviour by people occupying important roles in society, whose behaviour should really act as an example to others," he said.
Jan Andreae, the former Ahold board member responsible for Europe, was given a suspended sentence of four months and fined 120,000 euros. Roland Fahlin, once a supervisory board member and accountancy committee chairman, was acquitted.
Ahold revealed in February 2003 that profits had been overstated by almost 1 billion euros ($1.28 billion), mainly in the United States, tarnishing its reputation as one of the Netherlands' leading firms and knocking its shares 75 percent. Both Van der Hoeven and Meurs resigned over the scandal and denied any wrongdoing. Van der Hoeven said he would appeal. The three men were found guilty of "forgery" by presenting letters to auditors stating Ahold had controlling stakes in four joint ventures but keeping secret "side letters" in which the ventures contested Ahold's control.
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