Fleming: SEC Has Started Inquiry
Nov. 14, 2002
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LEWISVILLE, Texas (AP) _ Grocery wholesale giant Fleming Cos. has disclosed that it is the subject of what it calls an informal Securities and Exchange Commission inquiry.
The Lewisville-based grocery distributor said the Fort Worth staff of the SEC was looking into Fleming's accounting and sales reporting.
In particular, Fleming officials said Wednesday that the SEC was checking its vendor trade practices, how it reported per-share earnings for last year's second quarter, and how it calculated same-store sales in the its retail food chains.
``We will, of course, cooperate fully with the informal inquiry and will provide the staff with all the information it needs in responding to its fact-finding,'' said Fleming chairman and chief executive Mark Hansen.
The disclosure came hours after Fleming announced it was selling 26 Food4Less stores in California and two still under construction to Save Mart Supermarkets for $165 million.
In the statement, the company blamed part of the inquiry on ``previous media speculation.''
The Wall Street Journal reported in September that Fleming unfairly withheld payments from vendors through a variety of invoice deductions. The Journal reported that while such deductions are routine in the industry, suppliers and ex-employees said the company pushes the practice to the extreme.
Fleming shares fell 89 cents, or 14.8 percent, to close Thursday at $5.11 on the New York Stock Exchange.