Tesco opens £85m compensation scheme for victims of 2014 accounting scandal

Tesco accounting

Tesco has opened an £85 million compensation scheme for investors misled by the 2014 accounting scandal.

First announced in March, the scheme will provide redress to the estimated 10,000 investors that bought into Tesco between August 29 and September 19, 2014.

Compensation has been set at 24.5p per share plus interest and the Financial Conduct Authority (FCA) will oversee the process.

Retail investors will be paid more than three times the rate of interest compared with City investors in the scheme, which will be administered by accountants from KPMG.

READ MORE:  Tesco fined £129m over 2014 accounting scandal

City investors affected by the scandal will receive interest at a rate of 1.25 per cent per annum, while retail investors’ interest will be charged at four per cent per annum.

The scandal in question relates to a £263 million back hole that was revealed in Tesco‘s trading update on August 29, 2014. This was later revised to £326 million.

An investigation by the Serious Fraud Office (SFO) found Tesco had committed market abuse when it exaggerated profits, and three former executives – UK boss Chris Bush, finance director Carl Rogberg and commercial director John Scouler – were charged last year with offences including false accounting and fraud by abuse of position.

READ MORE:  Probe into auditor‘s role in Tesco accounting scandal ends

The trio, who have all pleaded not guilty, are expected to stand trial from next month.

For chief executive Philip Clarke, who stepped down just weeks after the black hole was unearthed, was let off by the SFO after being under investigation last year.

Alongside compensation, the FCA and SFO also slapped Tesco with a £129m fine.

While accounting regulators have dropped a case against auditor PwC, investigations into employees’ actions are continuing.

Click here to sign up to Retail Gazette‘s free daily email newsletter


Please enter your comment!
Please enter your name here