However, the markets' executive body does not have the power to impose sanctions.
Analysts said the warning did not have financial implications, but some said the Euronext decision could hand ammunition to those shareholders seeking compensation for their stock losses in class-action suits in the United States.
Ahold shares opened more than 1% higher at 6.34 euros, a 3.8% gain so far this year after a 42.3 percent drop in 2003. Its stocks received a boost this week when Chief Executive Anders Moberg told Reuters an asset disposal program was well under way. He also reiterated confidence that the company would reach its ambitious profitability targets.
Euronext said Ahold had broken listing rules because it failed to report accounting irregularities at its U.S. Foodservice in time. The warning also concerned the improper consolidation of the ICA retailer in Sweden.
"It is a serious letter, but it has no financial implications. It will cause some damage to Ahold's reputation and the media will jump on it, but no financial implications," said financial markets' analyst Mark van der Geest at Rabobank.
Euronext said that Ahold had "failed to publish so much as general information on the evidently major case of fraud at US Foodservice within a few days of learning of the case on 12 February 2003."
Euronext added in a statement Ahold had also not published the information shortly after February 14, 2003, "when Ahold's Supervisory Board discussed this major case of fraud."
Ahold issued a statement on February 24, revealing profit overstatements at its US Foodservice unit, the resignation of its chief executive and chief financial officer and irregularities around the consolidation of ICA.
In its defense, Ahold issued a statement in which it stated that it "disagrees with Euronext's decision, as well as the advice of the Committee (Euronext Listing and Issuing Rules Advisory Committee), which, in Ahold's view, is based on an incomplete and incorrect understanding of the facts. There is no possibility for Ahold to appeal the decision of Euronext. Ahold believes that it did not violate Article 28h of the Listing and Issuing Rules and that by issuing a press release on February 24, 2003, it acted according to the Listing and Issuing Rules with respect to both matters for the following reasons."
Ahold further explained its handling of the U.S. Foodservice accounting scandal with the following comments:
"Because it took significant time for Ahold to fully understand the magnitude of the accounting irregularities at U.S. Foodservice, Ahold believes that the issuance of a press release prior to February 24, 2003, was not required pursuant to Article 28h of the Listing and Issuing Rules.
"On February 12, 2003, Ahold was informed that accounting irregularities concerning the recognition of vendor allowances had been discovered at U.S. Foodservice. Ahold immediately hired external experts to start internal investigations to determine the extent of the accounting irregularities. As a consequence of the complex nature of the promotional allowance arrangements at U.S. Foodservice and the concealment of information relating to such arrangements by former members of U.S. Foodservice's management, Ahold did not have a sufficient understanding of the magnitude of the accounting irregularities at U.S. Foodservice until the weekend of February 22-23.
"Ahold believes that issuing a general press release on or shortly after February 12, 2003, could have been potentially misleading, and would have created uncertainty among investors. Furthermore, Ahold believes that given the serious nature of the issues the company was facing and the consequent potential impact on compliance with certain financial covenants in existing credit facilities and the continued availability of those facilities, it was essential for the continuity of the company to arrange a new credit facility before issuing a press release.
"Disclosure of the accounting irregularities at U.S. Foodservice in general terms would have seriously endangered Ahold's ability to obtain a credit facility and therefore could have resulted in an acute liquidity crisis."