The world's third biggest retailer, Ahold, has lost two thirds of its market value after revealing that profits in the US had been overstated by $500 million.

Owner of Dutch supermarket Albert Heijn and Europe's second largest retailer, Ahold finances have come under constant scrutiny since last year when discrepancies were noted between Dutch and US accounting rules.

Irregularities at Ahold's US Foodservice business were said to be due to the booking of higher promotional allowances than actual payments received.

The company admitted the overstatement could have exceeded an operating level of $500million.

Ahold currently has a net debt of more than 12 billion euros, and questions have now been raised on the company's ability to repay.

While chief executive officer Cees van der Hoeven and chief financial officer Michael Meurs will resign, investigations will continue into the US Foodservice accounts.