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Financieele Dagblad, a financial publication in the Netherlands, reported yesterday that Ahold knew last November that its cash flow had fallen precipitously because of issues related to vendor promotional payments, the precise problem that led to the accounting scandal that forced the resignation of its CEO and CFO, as well as the revelation of $500 million in overstated profits.

Ahold reportedly first disclosed its fiscal problems in a regulatory filing with the US Securities and Exchange Commission (SEC) last November. It said then that its third quarter cash flow was down by almost 50 percent from a year before.

The company is now being investigated in the US, the Netherlands, and Uruguay. Its stock price is down more than 70 percent since the revelations were first made. And there is persistent speculation that Ahold will have to sell off some of its assets to put it back on firm financial footing, with companies such as Carrefour and Casino saying they would consider acquiring any Ahold companies that go on the sales block.

However, despite all the speculation, the company’s new chairman, Henny de Ruiter, said yesterday that he did not believe that either a bankruptcy or sale of the company are in the cards for the immediate future.

He also rejected the idea that Albert Heijn, the company’s flagship chain in the Netherlands, would be sold off.

The Ahold executive also dismissed the idea that accounting problems in the US were not responsible for the resignations of Ahold CEO Cees van der Hoeven and CFO Michiel Meurs -- a notion that was advanced by US Foodservice president James L. Miller earlier this week.
KC's View:
Hard to imagine that the company stays intact…but we’ll give de Ruiter the benefit of the doubt.

At least, we will for this morning. No promises how we’ll feel tomorrow.