3rd Tesco director cleared in £250m accounting fraud

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Tesco
// Carl Rogberg, ex-Tesco UK finance director, cleared from fraud & false accounting charges
// SFO dropped the case – relating to 2014 £250m accounting scandal – against him
// The 2 other ex-directors implicated in the trial cleared last month
// Tesco CEO at the time of the scandal already been let off by the SFO

Tesco’s former UK finance director has been cleared of fraud and false accounting in relation to the retailer’s profits being overstated by £250 million.

Serious Fraud Office (SFO), who had led the prosecution, dropped the case against Carl Rogberg, one of the three former Tesco directors implicated in the trial.

Rogberg was accused of knowing that income was being wrongly included in records to meet targets and make Tesco look financially healthier than it was.

His trial was abandoned last year after he suffered a heart attack, and he was too ill to face a retrial alongside Tesco’s former UK food commercial director John Scouler and former UK managing director Chris Bush.

Last month, Southwark Crown Court dismissed the case against both Bush and Scouler, who were accused of fraud and false accounting, arguing that the case was too “weak”.

Rogberg appeared at the same court today, where not guilty verdicts were formally entered on the same charges after the SFO announced it would offer no evidence against him.

Tesco’s shares nose dived by nearly 12 per cent, wiping £2 billion off its share value, when it announced in September 2014 that a trading statement the previous month had exaggerated profits by a quarter of billion pounds.

Rogberg’s acquittal means neither Tesco nor Bush or Scouler have been successfully prosecuted over one of the biggest corporate scandals in recent history.

Neil O’May of Norton Rose Fulbright, who represented Rogberg, said: “This is more than simply an acquittal by a jury. It is a finding that there was insufficient evidence on which the case could have been brought. This is unprecedented in high-profile serious fraud cases.

“There must be real concern that a serious fraud case is brought without the SFO having expert accounting evidence in which to understand the nature of the case.

“There was also no real investigation undertaken to show whether or not there was indeed fraudulent activity as alleged at the level of buyers and suppliers.”

Details of a deferred prosecution agreement between Tesco and the SFO can now be reported after restrictions lapsed automatically following the end of the criminal proceedings.

As part of the agreement, which is expected to be published by the SFO on Wednesday, Tesco agreed to pay a fine of £129 million but avoided a trial.

The acquitted defendants’ lawyers argued that it was unfair to publish the “statement of facts” contained in the agreement, which “ascribes wrongdoing to them”, according to a High Court ruling made last week by Sir Brian Leveson.

Their first trial of Bush, Scouler and Rogberg began in September 2017 following years of delays.

However, after Rogberg suffered a heart attack in early 2018 and was admitted to hospital, then-Judge Deborah Taylor was forced to dismiss the jury, stating his illness could prejudice their decision.

Former chief executive Philip Clarke, who stepped down just weeks after the accounting black hole was unearthed, had been off by the SFO after being under investigation.

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