"In particular the 'class-A actions' in the United States last long, even 10 years is possible. But we will have to follow these procdures, there is no other way to protect the company," Chief Financial Officer Hannu Ryopponen said in an interview with the Algemeen Dagblad newspaper.
He said the financial restructuring of Ahold, hit by a one-billion-euro profit overstatement scandal in February 2003 that nearly led to its collapse, was well underway and the planned asset sales were nearly completed.
"In 2005 we will have a normal level of profitability, without any loss-maming units. But the turnover will be lower due to the disposal of subsidiaries. Then, Ahold will be present in the U.S., the Netherlands and Scandinavia," he said.
Ryopponen and new chief executive Anders Moberg have drawn up a "Road to Recovery" plan for the period to 2005 to boost profit margins and cut debt in order to obtain "investment grade" rating of its debt instead of the junk rates it got last year.
Ahold, some subsidiaries and certain current and former directors, officers and employees have been named in a number of civil lawsuits and purported class actions.
In addition, criminal and civil investigations and inquiries have been started, including investigations by the U.S. Department of Justice, the U.S. Departmentof Labor, the SEC, the NYSE, the NASD, the Dutch Public Prosecutor, the Dutch AFM financial market regulator and Euronext.
Ahold said in its annual report published on Thursday, May 6, that plaintiffs claim to have suffered billions of dollars in damages but have not yet specified the amount of compensation sought.
The company also said that on April 8 it was served with a court summons by insurer AIG which wants to terminate the Directors, Officers and Corporate Liability policy of $100 million for Ahold's U.S. Foodservice subsidiary where much of the profit overstatements took place in 2002.
The annual report also showed that former Ikea and Home Depot executive Moberg earned some three million euros ($3.58 million) as Ahold chief executive in 2003 while the finance director received some one million euros.
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