Tesco handed £214m penalties on false accounting
28 Mar 2017, 13:10
London: Supermarket Tesco has agreed to a fine and compensation costs totalling £214 million ($268 million, 247 million euros) after an accounting scandal at Britain’s biggest retailer, the Serious Fraud Office said on Tuesday.
Under a deal struck with the SFO over an affair stretching back three years, Tesco will not face prosecution.
However, charges have previously been brought against three former Tesco executives, who face trial over alleged fraud and false accounting.
‘Tesco... has in principle reached a deferred prosecution agreement with the UK Serious Fraud Office regarding historic accounting practice,’ the supermarket giant said in a statement.
This ‘is a voluntary agreement under which Tesco Stores Limited will not be prosecuted provided the business fulfils certain requirements, including paying a financial penalty of £129 million.’
In addition, Tesco will compensate shareholders by around £85 million in total.
Tesco had been accused of overstating profits by £326 million between February and September 2014.
Following the incident, the company appointed outsider and former Unilever executive Dave Lewis to replace long-standing chief executive Philip Clarke and oversee a drastic restructuring of the group, which in recent years has also faced fierce competition in the UK from German-owned discount retailers Aldi and Lidl.
‘Over the last two and a half years, we have fully co-operated with this investigation into historic accounting practices, while at the same time fundamentally transforming our business,’ Lewis said in the statement.
‘We sincerely regret the issues which occurred in 2014 and we are committed to doing everything we can to continue to restore trust in our business and brand.’
Tesco is the world’s third-biggest supermarket group after France’s Carrefour and global leader and US giant Wal-Mart.