Case 1:03-md-01539-CCB Document 122 Filed 02/18/2004 Page 1 of 444 UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND x Civil No.: 1:03-MD-01539 IN RE ROYAL AHOLD N.V. SECURITIES & ERISA LITIGATION ALL SECURITIES ACTIONS x CONSOLIDATED AMENDED SECURITIES CLASS ACTION COMPLAINT Andrew J. Entwistle, Esq. (AE-6513) Stephen D. Oestreich, Esq. (SO-8933) Robert N. Cappucci, Esq. (RC-2193) Johnston de F. Whitman, Jr., Esq. (JW-5781) Jeffrey A. Klafter, Esq. (JK-0953) (Of Counsel) Asuncion C. Hostin, Esq. (MD Bar No. 24008) ENTWISTLE & CAPPUCCI LLP 299 Park Avenue, 14th Floor New York, New York 10171 Telephone: (212) 894-7200 Facsimile: (212) 894-7272 Lead Counsel for Lead Plaintiffs, the Public Employees’ Retirement Association of Colorado and Generic Trading of Philadelphia, LLC Andrew Radding, Esq. (Bar No. 00195) Gregory M. Kline, Esq. (Bar No. 14363) ADELBERG, RUDOW, DORF & HENDLER, LLC 600 Mercantile Bank & Trust Building 2 Hopkins Plaza Baltimore, MD 21201 (410) 539-5195 (410) 539-5834 Liaison Counsel for Lead Plaintiffs, the Public Employees’ Retirement Association of Colorado and Generic Trading of Philadelphia, LLC Case 1:03-md-01539-CCB Document 122 Filed 02/18/2004 Page 2 of 444 TABLE OF CONTENTS I. INTRODUCTION .............................................................................................................. 2 II. JURISDICTION AND VENUE ....................................................................................... 35 III. THE PARTIES.................................................................................................................. 39 A. The Public Employees’ Retirement Association of Colorado .......................................... 39 B. Generic Trading of Philadelphia, LLC ............................................................................. 40 C. The Ahold Defendants ...................................................................................................... 40 1. Royal Ahold N.V. ....................................................................................................... 40 2. Ahold USA.................................................................................................................. 42 3. U.S. Foodservice, Inc.................................................................................................. 43 D. The Deloitte Defendants ................................................................................................... 44 1. Deloitte & Touche LLP............................................................................................... 44 2. Deloitte & Touche Accountants.................................................................................. 44 E. The Individual Defendants................................................................................................ 45 1. Cees Van der Hoeven.................................................................................................. 47 2. Michiel Meurs............................................................................................................. 48 3. Henny de Ruiter.......................................................................................................... 50 4. Cor Boonstra ............................................................................................................... 50 5. James L. Miller ........................................................................................................... 51 6. Mark Kaiser................................................................................................................. 52 7. Michael Resnick.......................................................................................................... 53 8. Tim Lee....................................................................................................................... 54 9. Robert G. Tobin .......................................................................................................... 54 i Case 1:03-md-01539-CCB Document 122 Filed 02/18/2004 Page 3 of 444 10. William J. Grize .......................................................................................................... 55 11. Roland Fahlin.............................................................................................................. 55 12. Jan G. Andreae............................................................................................................ 56 F. THE UNDERWRITER DEFENDANTS ......................................................................... 57 1. ABN AMRO Rothschild............................................................................................. 59 2. Goldman Sachs International...................................................................................... 60 3. Merrill Lynch International......................................................................................... 61 4. ING Bank N.V. ........................................................................................................... 62 5. Rabo Securities N.V.................................................................................................... 63 6. Kempen & Co. N.V..................................................................................................... 65 IV. SUMMARY OF AHOLD’S BUSINESS AND GROWTH............................................. 65 A. United States Acquisitions ................................................................................................ 72 1. Retail Acquisitions ...................................................................................................... 72 2. Food Service Acquisitions .......................................................................................... 73 B. European Acquisitions and Joint Ventures ....................................................................... 75 1. The Netherlands .......................................................................................................... 75 2. Poland.......................................................................................................................... 75 3. Spain............................................................................................................................ 76 C. Central American Acquisitions and Joint Ventures.......................................................... 77 D. South America Acquisitions and Joint Ventures .............................................................. 77 E. Asia Pacific Acquisitions.................................................................................................. 79 1. Malaysia...................................................................................................................... 79 2. Thailand ...................................................................................................................... 79 ii Case 1:03-md-01539-CCB Document 122 Filed 02/18/2004 Page 4 of 444 3. Indonesia ..................................................................................................................... 79 F. Scandinavian Acquisitions and Joint Ventures................................................................. 79 V. AHOLD’S FEBRUARY 24, 2003 ANNOUNCEMENT................................................. 79 VI. AHOLD COMMENCES INTERNAL INVESTIGATIONS........................................... 88 VII. GOVERNMENTAL AND REGULATORY INVESTIGATIONS COMMENCE......... 90 A. The SEC Investigation...................................................................................................... 90 B. The Department of Justice Investigation.......................................................................... 91 C. The NYSE and NASD Investigations ............................................................................... 92 D. The Department of Labor Investigation............................................................................ 92 E. The Office of the Dutch Public Prosecutor’s Investigation.............................................. 92 F. The Euronext Investigation............................................................................................... 93 G. The Dutch Authority For Financial Markets’ Investigation............................................. 94 H. Investigation Relating To Illegal Payments in Argentina ................................................. 94 VIII. FURTHER DETAILS OF AHOLD’S FRAUD EMERGE .............................................. 95 A. USF’s Chief Financial Officer “Blew The Whistle” In 2000 After Ahold Acquired USF, But Defendants Ignored His Concerns .................................................... 95 B. USF Improperly Booked Vendor Rebate Income Since At Least 1997 ........................... 97 C. Federal Regulators Launch Probe Of USF’s Vendors...................................................... 98 D. The Internal Investigation Reveals Further Fraud At USF And Ahold Implicates Lee and Kaiser .................................................................................................................. 99 E. Ahold Terminates Defendants Miller and Resnick......................................................... 102 F. Ahold Disclses $24.8 Billion In Improper Revenues From The Company’s Joint Ventures ................................................................................................................. 105 G. Ahold Discloses Fraud At Its United States Retail Operations ...................................... 106 iii Case 1:03-md-01539-CCB Document 122