Amsterdam, April 4 -Dutch prosecutors on Tuesday faulted former top managers at supermarket group Ahold for eschewing accounting rules to pursue growth, leading to one of Europe's largest financial scandals.
The trial for fraud is the final act in a saga that pushed one of the world's largest retailers and foodservice groups to the brink of collapse.
Prosecutors will state the sentence they are seeking later on Tuesday and the court will hand down its verdict on May 22.
The suspects include former Chief Executive Cees van der Hoeven and ex-Chief Financial Officer Michiel Meurs, who both resigned over the scandal. They have denied any wrongdoing.
Ahold revealed in February 2003 that profits had been overstated by almost 1 billion euros ($1.2 billion), mainly in the United States, tarnishing its reputation as an icon of corporate stability in the Netherlands.
The charges relate to the consolidation of several retail subsidiaries and improperly adding sales of joint ventures in Scandinavia and South America to Ahold's accounts by deceiving accountants with false letters.
"In 2003 no one could believe that top management at Ahold did business in such a shadowy way. Unfortunately investigations have shown that Ahold management did not act with integrity, and against the law," prosecutor Hendrik Jan Biemond told the court.
The suspects include Jan Andreae, the former board member responsible for Europe, and Roland Fahlin, once a supervisory board member and accountancy committee chairman.
The prosecution depicted a corporate culture at Ahold where achieving 15 percent profit growth per year was most important.
"The culture at Ahold was one where the economic reality of reaching growth targets was predominant. The legal and accounting reality was seen as another reality that was less important," Biemond said.
The four men have been charged with deceiving auditors by presenting letters stating that Ahold had controlling stakes in four joint ventures but keeping secret "side letters" in which the ventures contested Ahold's control.
Ahold grew to be the world's fourth-largest food retail and foodservice group through a multibillion-dollar spending spree -- including more than 50 acquisitions under Van der Hoeven -- but the accounting scandal forced it to restate its accounts from 2000 onwards and take on debt to keep afloat.
WHITE-COLLAR CRIME
Although sentences for white-collar crime have been much more lenient in the Netherlands than in the United States, a prominent Dutch shareholder activist group is hoping for a prison sentence.
Under Dutch law, falsification carries a maximum sentence of six years, with fraud carrying a maximum of three years.
"If the trial is a success it will be the first time the public prosecution makes a serious achievement in the Netherlands. It will be good for morale," Pieter Laekeman, director of shareholder activist group SOBI, told Reuters.
"People in the Netherlands feel that white-collar crime is not being fought," he said outside the courtroom.
The collapse of U.S. company WorldCom resulted in a 25-year sentence for former Chief Executive Bernard Ebbers for overseeing an accounting fraud, but he is free pending an appeal.
Ahold itself is not party to the case brought by the Dutch public prosecutor.
In 2004, Ahold settled with Dutch public prosecutors by paying a fine and with the U.S. Securities and Exchange Commission without paying a fine. It has offered shareholders $1.1 billion to settle a class action suit.