Three former Tesco PLC executives have been charged by the Uks Serious Fraud Office for false accounting and abusing their positions. This would be the first charges announced by the office since the beginning of the investigation; of course, more will likely follow.
The SFO had originally opened this criminal investigation in October of 2014 to look into Tesco after Britain’s largest grocer was found to have overstated profits by GPB263 million as a result of accounting practices that allowed them to speed up the recognition of promotional income from suppliers and had delayed the accrual of associated costs, to the tune of valued at £263 million.
This scandal, then, forced Tesco’s chief executive and chairman to resign. This, of course, brought upon other complications during a particularly tough time for the company who was also facing more competition from discount suppliers. Thankfully, new CEO Dave Lewis has helped Tesco to improve.
A spokesman from the SFO reports:”Tesco continues to cooperate with the SFO’s investigation. The last two years have seen an extensive program of change at Tesco, but given this is an ongoing legal matter, we are unable to provide any further comment at this time.”
According to a representative from the FTSE 100 retail group, “We note the decision of the SFO to bring a prosecution against former colleagues in relation to historic issues and acknowledge the investigation into the Company is ongoing,” adding that it has and will continue to cooperate with the investigation.
The SFO has charged former UK director of finance Carl Rogberg, as well as former UK managing director Chris Bush, and former UK food commercial director John Scouler each with one count of abuse of position and each with one count of false accounting. Now the trio must appear in the Westminster Magistrate’s Court, on September 22.
In response to the SFO’s statement, Tesco also goes on to say, “The last two years have seen an extensive programme of change at Tesco, but given this is an ongoing legal matter, we are unable to provide any further comment at this time.”