Supermarket chain Ingles Markets is being formally investigated by the Securities & Exchange Commission for its accounting of vendor allowances. The SEC began an informal investigation of the chain in 2004, and formalized its inquiry in May.
The SEC asked Asheville, NC-based Ingles for documents related to one vendor contract, other vendor contracts from 2002-04, and its general vendor-allowance accounting practices. Ingles conducted an internal review and restated its financial statements for fiscal 2002 and 2003 and the first nine months of 2004.
Ingles hired a new CFO in April, Ronald Freeman, to replace Brenda Tudor, who resigned in March.
Meanwhile, a shareholder filed suit on June 15 against Ingles and some current and past directors on its board for allegedly failing to maintain internal controls. The suit was filed in U.S. District Court for the Western District of North Carolina.
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