Thursday, January 20, 2022

Tesco could be fined “well in excess” of £100m over accounting scandal

Tesco is reportedly set to pay a hefty fine over the 2014 accounting scandal that saw it exaggerate its profits by more than £300 million.

According to Sky News, the lawyers representing the Big 4 grocer are close to finalising a deferred prosecution agreement (DPA) after months of discussions with the Serious Fraud Office (SFO).

While a deal could be reached within weeks, Sky News reported that there was no certainty a final agreement would be finalised.

A DPA means Tesco would plead guilty to offences on the way it accounted for profits in the period leading to the scandal’s exposure.

Should it be finalised, Tesco‘s financial penalty could be “well in excess” of £100 million.

Three former Tesco executives – former Tesco UK boss Chris Bush, former finance director Carl Rogberg and former commercial director John Scouler – were charged last year with offences including false accounting and fraud by abuse of position, and are due to stand trial next year.

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The trio have said they will plead not guilty.

The accounting scandal relates to how Tesco posted profits had were exaggerated by more than £260 million – a number subsequently revised upwards to £326 million.

The revelation came soon after Dave Lewis was appointed chief executive of the retailer, replacing Philip Clarke – who was let off by the SFO after being under investigation.

The SFO first began its Tesco inquiry in October 2014, recently confirmed that its probe into the retailer’s accounting practices was not yet complete.

Shareholder lawsuits relating to the scandal have also been brought against Tesco, although the retailer has settle some of these with modest sums.

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