Shareholders who suffered losses in Royal Ahold’s 2003 fraud
scandal plan to take the Dutch retailer’s auditors, Deloitte
Netherlands, to court for damages that could total hundreds of
millions of euros. In February 2003, Ahold’s share price crashed
after investigations revealed large-scale fraud, primarily
concerning the overstatement of vendor allowances, at its
subsidiary, US Foodservice.
Following the revelation of the fraud, Dutch financial reporting
watchdog the Foundation for Investigation of Business Information
(Stichting Onderzoek Bedrijfs Informatie – SOBI) made a series of
complaints against Deloitte before the disciplinary board in the
In March this year the board handed down its findings, which ruled
against Deloitte in one part of the four-part case. SOBI chairman
Pieter Lakeman said the ruling against Deloitte found the Big Four
firm did a “bad job” auditing US Foodservice. Both Deloitte and
SOBI are appealing the decisions.
Using the disciplinary board finding as a base, SOBI is now leading
a damages claim on behalf of the shareholders. The claim is open to
all shareholders who bought their shares after 7 March 2001, when
Deloitte signed off on Ahold’s annual report for 2000, Lakeman
The 2000 report was the first that concealed the fraud at US
Foodservice. Deloitte detected irregularities in its audit of
Ahold’s 2001 report – at which point the fraud investigations
Deloitte is confident
The Big Four firm said in a statement that it is “surprised to
learn that the announced claim is being brought at a time when the
appeal against the disciplinary committee’s decision is still
pending”. “Deloitte is looking forward to the [appeal] decision
with confidence,” the firm said.
The decision on the appeals is expected in March or April 2008.
Lakeman said the reason the shareholders will not wait until that
time to file the complaint is that under Dutch law a claim must be
made within five years, and that period will expire on 24 February