NEW YORK, Feb. 26, 2003 (PRIMEZONE) -- On February 26, 2003, the law firm of Wechsler Harwood LLP filed a class action suit against Royal Ahold, NV ("Ahold" or the "Company") (NYSE:AHO) and certain of its officers, in the United States District Court for the Eastern District of Virginia on behalf of all persons or entities who purchased Ahold American Depository Receipts ("ADRs") from January 8, 2002 through February 21, 2003 (the "Class Period"). Also included in the Class are those U.S. citizens who purchased Ahold common stock on foreign exchanges during the Class Period.
The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission by materially overstating Ahold's income in violation of Generally Accepted Accounting Principles ("GAAP").
On February 24, 2003, Ahold stunned the market when it disclosed that operating earnings for fiscal year 2001 and expected operating earnings for fiscal year 2002 were overstated by an amount that the company believes may exceed $500 million. The overstatements of income discovered to date will require the restatement of Ahold's financial statements for fiscal year 2001 and the first three quarters of fiscal year 2002. As disclosed by the Company, and as alleged in the Complaint, during the 2002 fiscal year-end audit for Ahold's U.S. Foodservice subsidiary, significant accounting irregularities were discovered in the recognition of income, including prepayment amounts related to U.S. Foodservice's promotional allowance programs. In light of the disclosure, Ahold President and Chief Executive Officer, Cees van der Hoeven, and Chief Financial Officer, Michael Meurs, will resign.
In response to the disclosure of Ahold's true financial condition, its ADRs plummeted from a close of $10.69 on February 21, 2003 to as low as $3.60 per ADR when trading resumed Monday, February 24, 2003. The decline represents a one-day loss of over 65%.
If you purchased Ahold securities during the period from January 8, 2002 through February 21, 2003, inclusive, you may, no later than April 28, 2003, move to be appointed as a Lead Plaintiff. A Lead Plaintiff is a representative party that acts on behalf of other class members in directing the litigation.
The Private Securities Litigation Reform Act of 1995 directs courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Ahold securities during the Class Period, please contact Wechsler Harwood LLP at www.whesq.com for a more thorough explanation of the Lead Plaintiff selection process.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 x-283
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.