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General Mills Notified by SEC of Possible Charges

February 04, 2004|From Reuters

Cereal maker General Mills Inc. said Tuesday that it had received notification from U.S. regulators that it may face charges in connection with its sales practices and related accounting.

The Securities and Exchange Commission's Wells notice relates to an inquiry that General Mills disclosed in October, the Minneapolis-based company said.

Chief Executive Steve Sanger and Chief Financial Officer James Lawrence are included in the notice and also could face charges. Those officers are required by law to sign off on the company's financial disclosures.

General Mills said it believed its sales practices and accounting were in compliance with regulations. A company spokesman said the notice was not directly related to a probe at Dutch grocery company Royal Ahold's U.S. Foodservice unit.

"This inquiry is about General Mills' sales practices and related accounting, not U.S. Foodservice," General Mills spokesman Tom Forsythe said.

The SEC contacted General Mills in April as part of a widening probe of accounting irregularities at the U.S. Foodservice food distribution unit.

Last year, U.S. Foodservice disclosed that its executives had inflated supplier rebates, requiring it to restate earnings by $880 million.

Companies that have been contacted in connection with the Ahold probe include Kraft Foods Inc., Sara Lee Corp., ConAgra Foods Inc., H.J. Heinz Co. and Hormel Foods Corp.

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