Akzo Nobel in court over pension accounting
NETHERLANDS – Dutch shareholder activist group SOBI has taken Akzo Nobel to court over its pension accounting – though the chemicals and drugs company rejects the charge.
SOBI, Stichting Onderzoek Bedrijfs Informatie, said in a statement that it “has summoned Akzo Nobel before the Business Chamber of the Amsterdam High Court because of their annual accounts 2002”.
It claims the firm did not make a profit of 818 million euros but a loss of 260 million euros. It says Akzo Nobel “masked this by not booking personnel costs (pension costs) in the profit and loss account but writing this amount directly from the reserves”.
Arnhem-based Akzo has rejected the charge, saying its financial statements are prepared in accordance with Dutch accounting standards and are accompanied by an unqualified auditors’ report.
“For the recognition of the pension liabilities the Company thus follows the internationally frequently applied standard SFAS 87, which also takes future salary increases into account,” Akzo said.
“Application of this standard resulted in a charge against shareholders’ equity of 1.1 billion euros for the minimum pension liability in the 2002 financial statements.”
And it rejected SOBI’s claim that this amount should have been charged against the statement of income. SOBI says its action is “based on multiple grounds”.
Last month Akzo said it would restructure its pension fund in a move that was seen as a benchmark case for Dutch corporate pension funds. It would continue to pay pension premiums to its pension fund, but staff would bear the risks of the fund's investments by making up the shortage if the fund's coverage ratio drops below 100%.
Nieuwersluis-based corporate information research foundation SOBI was set up in 1976 with the aim of improving the financial disclosure of Dutch businesses, in the interest of creditors, shareholders and staff.