Suspended jail terms, hefty fines for Ahold execs

A Dutch court found former Ahold chief Cees Van der Hoeven guilty of fraud charges. The court sentenced Van der Hoeven to a nine-month suspended jail term and the payment of a €250,000 fine. Also found guilty were Michiel Meurs and Jan Andreae, both receiving conditional jail terms and lesser fines for their involvement in one of Europe’s biggest financial scandals.

Van der Hoeven, Andreae and Meurs, Ahold’s former chief financial officer, all maintained their innocence and denied any wrongdoing. Prosecutors, who have demanded 14 month jail sentences for Van der Hoeven and Meurs, said the court ruling was lenient, adding they will file an appeal for higher penalties. In the US, top executives found guilty of fraud usually get a jail term of up to 30 years, but European justice observers say the Ahold executives were not accused of enriching themselves. Meurs also got a nine-month suspended jail term and was told to pay a fine of €225,000. Andreae gets a four-month conditional jail term and a €120,000 fine.

The court acquitted the fourth defendant, Roland Fahlin, a former board member who was chairman of Ahold's bookkeeping committee. The court said both Van der Hoeven and Meurs were guilty of improperly booking sales from four subsidiaries in Scandinavia and Brazil, and for misleading Ahold's accountant. Van der Hoeven and Meurs resigned in February 2003 after Ahold publicly disclosed the fraud. Ahold shares lost two-thirds of their value overnight and eventually restated earnings for 2002 to a €4.33 billion (US$5.01 billion) loss. Ahold avoided insolvency by selling assets and by an emergency credit line from its banks.