ID NEWS UPDATE: Sara Lee reps 'working in support' of USF investigation

Sara Lee Corp., Chicago, has stated that an internal review of its relationship with U.S. Foodservice (USF), Columbia, MD, has revealed that three of its salespeople independently confirmed to USF auditor Deloitte & Touche inaccurate amounts payable to the national broadliner. These amounts were "inconsistent" with the formal reporting of rebate balances provided by Sara lee on a monthly basis to USF, the branded manufacturer says. "Documents indicate that these individuals improperly responded to direct requests from senior U.S. Foodservice executives to confirm rebates and balances due from Sara Lee that were inaccurate and higher than what was owed."

The three reps were not authorized to make the confirmations and have been relieved of their sales responsibilities, Sara Lee emphasizes. They have not been suspended as reported in ID's first web alert but rather are "working in support of the investigation," a spokesperson adds.

"While this is a serious matter, we want to emphasize that Sara Lee is not the focus of this investigation, and this discovery in no way affects our financial results," points out C. Steven McMillan, Sara Lee chairman, president and ceo. "We will continue to cooperate fully with the SEC's investigation into the accounting practices at the U.S. foodservice unit of Royal Ahold.

The company is providing its findings and related materials to the Securities and Exchange Commission (SEC) in conjunction with the SEC's ongoing investigation of USF accounting practices in relation to booking of promo monies.

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