Serious Fraud Office to investigate Tesco
The Serious Fraud Office (SFO) is to carry out a criminal investigation into the finances of UK supermarket Tesco, according to reports by the BBC.
It is the latest twist to follow the announcement of a £250 million overestimation of the firm’s profits in September which prompted the suspension of eight executives – including beer wine and spirits director Dan Jago – and the stepping down of its chairman, Sir Richard Broadbent.
Bosses have since admitted that the profit shortfall was in fact £263 million and that its post-tax profits were down by 92% from £1.39bn to £112m, with sales from stores open at least a year suffering a 5.5% drop.
Last week accountancy firm Deloitte completed its own investigation into Tesco’s misreported profits confirming that the supermarket chain had overstated its profits by £118m in the first half of this year, by £70m in the 2013-2014 financial year and by £75m the year before that.
Today, its was reported that the SFO will now step in, joining the Financial Conduct Authority, the City watchdog, to launch a criminal investigation into Tesco’s finances, while the UK accountancy regulator, the Financial Reporting Council, is also said to be monitoring its actions.
Despite misreported profits dating back for the last three years, wine retail consultant Allan Cheesman last week stated his belief to the drinks business that Tesco’s beer, wine and spirits division was not likely to have contributed much, if anything, to the supermarket’s accounting “black hole”.
Eight executives, including Jago, remain suspended while the investigation takes place.