Even as the Enron trial unfolds in Houston, what is being billed as the Dutch equivalent is scheduled to begin this week in The Netherlands as Cees van der Hoeven and Michiel Meurs, the former CEO and CFO of Royal Ahold, go on trial in Amsterdam.
The two former executives, who were forced out of Ahold as a financial scandal enveloped the company, are charged with improperly booking sales from four subsidiaries in Scandinavia and Brazil, and deceiving the public about its relationship with those subsidiaries. Also charged in the case are Roland Fahlin, a former Ahold board member who was chairman of the company's bookkeeping committee, and Jan Andreae, the company's former manager for European activities outside the Netherlands.
Not charged in this case is Ahold as a corporate entity; this case specifically deals with the allegedly illegal actions of these executives. However, Ahold already has spent more than $1 billion to settle shareholder lawsuits.
The Dutch case is not related to the company’s financial problems in the US, which were connected to the artificial inflation of sales numbers by Ahold’s US Foodservice subsidiary. That case was settled when the US Securities and Exchange Commission (SEC) agreed to let the executives go without admitting guilt, but forced them to guarantee that they would never again be officers in a publicly traded company.
The former Ahold executives in the Dutch case continue to maintain their innocence.
The two former executives, who were forced out of Ahold as a financial scandal enveloped the company, are charged with improperly booking sales from four subsidiaries in Scandinavia and Brazil, and deceiving the public about its relationship with those subsidiaries. Also charged in the case are Roland Fahlin, a former Ahold board member who was chairman of the company's bookkeeping committee, and Jan Andreae, the company's former manager for European activities outside the Netherlands.
Not charged in this case is Ahold as a corporate entity; this case specifically deals with the allegedly illegal actions of these executives. However, Ahold already has spent more than $1 billion to settle shareholder lawsuits.
The Dutch case is not related to the company’s financial problems in the US, which were connected to the artificial inflation of sales numbers by Ahold’s US Foodservice subsidiary. That case was settled when the US Securities and Exchange Commission (SEC) agreed to let the executives go without admitting guilt, but forced them to guarantee that they would never again be officers in a publicly traded company.
The former Ahold executives in the Dutch case continue to maintain their innocence.
- KC's View:
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Mark Twain once said that the offspring of riches are pride, vanity, ostentation, arrogance and tyranny.
Which sounds like a pretty good description, based on everything we’ve heard, of the regime of Cees van der Hoeven…and the greatest of these, perhaps, was arrogance.
It seems fair to say, whatever the verdict in this trial and the decisions reached by the SEC, that these executives lost touch with what their responsibilities were supposed to be – to behave honorably, honestly and ethically with regard to their employees and shareholders.
Their fate, and the public humiliations that they continue to face, should serve as a warning to other senior executives.
