You are here
AMSTERDAM -- Dutch supermarket and food retailer Royal Ahold NV today said it had appointed Lawrence S. Benjamin the new c.e.o. at its U.S. Foodservice division, which earlier this year was at the center of an accounting irregularities scandal.
Benjamin, currently c.e.o. at NutraSweet Co. in Chicago, will join U.S. Foodservice effective Nov. 1. He has held various executive positions in the food industry, initially at Kraft Foods, Inc. and later as president & c.e.o. at Stella Foods and Specialty Foods Corp., both holdings of Oak Hill Capital Management.
Last year Ahold unveiled accounting irregularities, primarily at its U.S. Foodservice business, which stretched to nearly one billion euros ($1.17 billion) between 2000 and 2002. As a result of the accounting irregularities, Ahold cut 363 million euros, or 32 percent, from its 2001 net profit and 196 million euros, or 18 percent, from that in 2000, with the bulk of the restatements due to the improper accounting of vendor rebates.
The accounting irregularities led to a string of resignations, including those of c.e.o. Cees van der Hoeven, c.f.o. Michiel Meurs, and board member Jim Miller, c.e.o. of U.S. Foodservice.
Ahold also suspended various employees across different branches at U.S. Foodservice, as the unit responsible for the bulk of the profit overstatements.
Critics thought Ahold might try to sell U.S. Foodservice at whatever price it could get, reckoning that the division -- which caters to restaurants and hospitals -- is too far removed from retailing for Ahold to be any good at it. But Ahold president and c.e.o. Anders Moberg said at a shareholder meeting in September that the company would hold on to U.S. Foodservice and that it would take up to two years to rebuild it. He added that only then can Ahold assess its future.
Ahold said an advisory board will be installed at U.S. Foodservice to oversee the required changes in controls systems and to ensure the implementation of solid corporate governance principles throughout the entire company.
The advisory board -- consisting of Moberg, Ahold c.f.o. Hannu Ryoppononen, chief corporate governance counsel Peter Wakkie, corporate executive board member William Grize and supervisory board member Robert Tobin -- will work closely with the Ahold corporate executive board. Additionally, two external members with extensive industry and business experience will be identified in due course.