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VEB Suspends Challenge to Validity of Ahold's Accounts

AMSTERDAM, The Netherlands. - A legal challenge to the validity of the Ahold 1998-2002 accounts by investor lobby VEB has been put on ice, potentially avoiding a costly and time-consuming procedure, the multinational retailer was quoted as saying on Monday, May 3.

"Ahold and the VEB have agreed, pending further consultation, that the proceedings will be put on hold and that the date on which Ahold is to file its statement of response, now scheduled for May 13, 2004, will be postponed," Ahold said in a statement cited by Reuters.

The statement did not give a reason for the suspension.

The VEB, which started the proceedings on Jan. 6, still has another case pending against the company which recently emerged from a major accounting scandal. VEB has asked a court to start a probe into former management practices at Ahold, which a Dutch enterprise court is scheduled to hear on June 17. VEB could seek damages on the basis of the findings of that inquiry.

The retailer, whose former top management resigned early last year after it revealed a one billion euro gap in its accounts, saw its shares lose more than two-thirds of their value. Stock price fell to 2.02 euros last February after the accounting scandal broke, but has since recovered much of the lost ground and closed at 6.46 euros on Friday, April 30.

After profit overstatements were revealed in February 2003 at Ahold's key U.S. subsidiary, U.S. Foodservice, investigations were also launched by the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice. In addition, Ahold faces a class-action suit in a U.S. Federal District Court that could seek damages of up to $2 billion, lawyers have said in the Dutch media.

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