International News - Investors seek US$1bn as Ahold compensation

Troubled Dutch retailer Ahold faces a lawsuit from a US legal firm claiming to represent investors seeking more than US$1 billion (£623 million) in compensation.

The unnamed investors - represented by Milberg Weiss Bershad Hynes & Lerach - claim the share price before last month's collapse was inflated.

The collapse came after Ahold announced on February 24 that operating earnings for 2001, and expected earnings for last year, had been overstated by US$500 million (£310.1 million).

The action names Koninklijke Ahold, as well as former chief finance officer Michael Meurs and chief executive Cees van der Hoeven.

A spokesman for Milberg Weiss reportedly said the company was aiming for compensation of 'more than US$1 billion' to cover the fall in Ahold's share price.

The Dutch giant would not comment on the claim, but said it hoped its internal investigation and audit would be completed by the end of June.

Earlier this week, Ahold appointed Dudley Eustace as interim chief financial officer. He is chairman of London-based Smith & Nephew. Eustace was also finance director of British Aerospace.

On March 6, Ahold filed a statement with the SEC, quoting an unofficial translation of a letter from auditor Deloitte Touche Tohmatsu dated February 24.

According to Ahold, the letter stated that the auditors were no longer prepared to stand by the accounts for 2000 and 2001.

Last week, French retail giant Carrefour said it would consider buying certain parts of the Ahold international portfolio, should they be put up for sale.