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. Last Updated: 07/27/2016

Ahold Is Raided in Criminal Probe

AMSTERDAM, Netherlands -- A Dutch public prosecutor kicked off a criminal investigation into possible falsification of accounts at scandal-hit global retailer Ahold at the weekend.

The public prosecutor said Monday that the specialized fiscal and economic crime unit, FIOD-ECD, had raided offices of Ahold and its accountant Deloitte & Touche on Saturday in a probe concerning the consolidation of several joint ventures.

The criminal investigation will cast a further pall on the world's third-largest food retailer and food services group, which had started to polish up its image after uncovering bookkeeping irregularities at the start of the year in one of the biggest European corporate scandals ever.

Last week, Ahold finished its own probe into almost a billion dollars in bookkeeping irregularities.

A spokeswoman for Ahold said "several boxes" of documents had been seized, but declined further comment.

"It would be improper for me to comment while the investigation is continuing," she said.

Marcel Baas of Deloitte & Touche said the accountant's offices in Amsterdam, Rotterdam and Eindhoven had been raided and a "considerable amount of documents" had been confiscated.

Deloitte was being probed "in a quality of witness," and had received a prior notification of the prosecutor's visit.

The Dutch justice authorities received some documents from Ahold in April after newspapers uncovered secret letters accompanying contracts related to Scandinavian joint venture ICA. These letters allowed Ahold to fully consolidate the joint venture while it did not have effective control.

"The suspicions [of falsification] are based on some side letters presented by Ahold concerning the consolidation of joint ventures in Sweden/Norway, Brazil, Guatemala and Argentina," the prosecutor said.

Ahold had been fully consolidating these joint ventures, which boosted its sales figures but not net earnings. On Feb. 24, Ahold said it would change the consolidation of ICA Ahold in Scandinavia, Jeronimo Martins Retail in Portugal and Disco Ahold International in South America.

The historical treatment of Bompreco in Brazil and Paiz Ahold in Guatemala was also going to be changed. Ahold aims to present its audited group accounts for 2002 by Aug. 15 to its key lending banks.

"I did expect something to come out of the woodwork, but I hadn't expected this. It comes at a rotten time for Ahold," said fund manager Gert Jan Geels at Eureffect. "This casts a slur on their reputation at a bad moment, just when they were presenting things as a return to business as usual."

Ahold broke the news of the raid itself in a statement.

"Ahold has given its full cooperation to this investigation and is cooperating fully with the Dutch public prosecutor, as it has been doing and will continue to do with the U.S. Securities and Exchange Commission and the U.S. Department of Justice in connection with their ongoing investigations," Ahold said.

The firm earlier this year found some $900 million in profit overstatements after bookkeeping irregularities mainly at its U.S. Foodservice subsidiary.

Ahold Chairman Henny de Ruiter and interim finance director Dudley Eustace have often used the word "fraud" to describe what happened at the U.S. Foodservice unit, where improper bookings of promotional discounts led to more than $850 million in profit overstatements. Further irregularities were found at U.S. retail unit Tops and Argentine subsidiary Disco.