A Deloitte Netherlands audit partner has lost a disciplinary
decision relating to the audits of a former subsidiary of Dutch
supermarket company Ahold, which could have major implications for
a civil case being faced by the firm.
The audit partner has received a formal reprimand from the
Appeals Board for Trade and Industry (College van Beroep voor het
Bedrijfsleven – CBB) following a case brought against him by Dutch
financial reporting watchdog the Foundation for Investigation of
Business Information (Stichting Onderzoek Bedrijfs Informatie –
SOBI).
In February 2003, Ahold’s share price crashed after
investigations revealed large-scale accounting fraud, concerning
the overstatement of vendor allowances at its former subsidiary, US
Foodservice.
Deloitte US audited the figures from US Foodservice, which were
then consolidated into Ahold’s results. Deloitte Netherlands was
Ahold’s auditor at the time and signed off on its consolidated
annual report.
The CBB originally ruled against Deloitte in March 2007 but the
decision was appealed by both Deloitte and SOBI. Earlier this year
SOBI has filed a €30 million ($40.2 million) civil claim on behalf
of a group of shareholders who suffered losses in Ahold’s 2003
fraud scandal.
The watchdog’s chairman Pieter Lakeman said the CBB decision was
“very positive” for its civil case.
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By GlobalData“The basis of our case is the wrong-doing of Deloitte and now
the wrongdoing has been officially decided, it backs us strongly,”
he said.
Deloitte said it was disappointed about the verdict of the
Appeals Board for Trade and Industry and would study the decision
in more detail.
“The final [CBB] verdict does not have any implication for the
civil case,” a spokesperson added.
