ID NEWS: USF paper trail reportedly leads to Kaiser; 'nonevent' for Sara Lee

The discovery by Sara Lee Corp., Chicago, that three of its sales reps had independently confirmed erroneous rebate information to auditors at U.S. Foodservice (ID web news 4/7/03)-the latest development in the government's investigation of accounting irregularities at the Columbia, MD, based national broadliner-leads back to confirmation letters from Mark Kaiser, USF's suspended head of marketing, according to The Washington Post.

Investigators reportedly saw letters in which Kaiser allegedly told suppliers they did not have to pay as much in rebates as they had promised. Kaiser's attorney has declined all comment while the situation is under investigation.

Meanwhile, other branded manufacturers contacted by investigators are busily scrutinizing documents. A Hormel Foods spokesperson has said that an internal investigation indicates no false confirms on rebate amounts. This supplier is "very centralized," according to a spokesperson, so that such activity by a salesperson would "not be possible."

At the same time, the discovery at Sara Lee can be considered a "nonevent" for the branded manufacturer, according to analysts. The problem here most likely resulted from "some overzealous employees trying to placate a major customer," one analyst told the Baltimore Sun. Sara Lee's own accounting is not an issue.

In any event, the revelation did not impact Sara Lee's stock price, which rose 42 cents to $19.74 per share yesterday.


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