Britain’s Serious Fraud Office (SFO) has charged three former senior Tesco PLC executives with fraud in its investigation into accounting practices at the country’s biggest supermarket chain.
A £250 million (US$333 million) overstatement of Tesco’s first-half profits in August 2014, due to booking deals with suppliers too early, led to the suspension of eight senior members of staff in the following months.
None of them commented at the time.
When Tesco revealed the overstatement, which was later raised to £263 million, it plunged the firm into the worst crisis in its about 100-year history and led to a £4 billion drop in its stock market value.
Carl Rogberg, Christopher Bush and John Scouler have been charged with one count of fraud by abuse of position and one count of false accounting, the SFO said in a statement on Friday, giving no further details of the charges.
Bush, 50, who was managing director of Tesco UK, Rogberg, 49, who was finance director UK and Scouler, 48, who was UK food commercial director, have been asked to appear at a London court on Sept. 22, the SFO said.
The SFO, which launched its criminal investigation in October 2014, said the alleged activity occurred between February and September of that year. The Tesco probe is seen as a key case for the SFO, that has had a checkered record in securing white-collar convictions over its 28-year history.
The convictions of three former Barclays traders in London’s third, high-profile London interbank offered rate trial in July after a bitterly-fought case have helped silence some of its critics.
Tesco said it has introduced a program of extensive change in the two years since Dave Lewis took over as chief executive officer and could not comment further.
Tesco agreed to pay US$12 million in November last year to settle a US lawsuit brought by holders of the company’s US depository receipts, alleging breaches of federal securities laws in connection with the overstatement of commercial income.
The UK Financial Reporting Council, which polices accountants, is still investigating how accountants PricewaterhouseCoopers LLP (PwC) audited Tesco’s accounts in the run-up to the scandal.
PwC declined to comment.
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