Britain's SFO opens criminal probe into Tesco profits error

GMT 15:56 2014 Wednesday ,29 October

Arab Today, arab today Britain's SFO opens criminal probe into Tesco profits error

Tesco supermarket in south London
London - AFP

Britain announced a criminal investigation on Wednesday into accounting practices at the country's biggest retailer, Tesco, after the supermarket group overstated its profits by £263 million ($424 million, 333 million euros).
Tesco said it was "cooperating fully" with the inquiry by the Serious Fraud Office (SFO), the government department responsible for investigating and prosecuting fraud cases.
"The SFO confirmed today that the director has opened a criminal investigation into accounting practices at Tesco plc," the department said in a short statement.
In an update to the London Stock Exchange, the supermarket group confirmed the development and said: "Tesco has been cooperating fully with the SFO and will continue to do so."
In the light of the criminal investigation, a separate probe by Britain's financial watchdog, the Financial Conduct Authority (FCA), has been discontinued with immediate effect.
Tesco, the world's third-biggest supermarket group, stunned investors last month when it revealed that its profit forecast for the six months to August 23 was overstated by an estimated £250 million.
Following an independent probe by accountants Deloitte, the final figure was last week put at £263 million, which includes overstatements of £70 million for Tesco's last financial year and £75 million relating to pre-2013/14.
The announcement, along with the revelation that Tesco's net profit had fallen to just £6.0 million in its first half from £820 million one year earlier, prompted the resignation of Tesco chairman Richard Broadbent on October 23.
Tesco has also suspended eight executives since recently-appointed chief executive Dave Lewis launched an inquiry on September 22 into the overstated profits.


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