Sep 26, 2017
Trial to begin of former Tesco executives accused of fraud
Sep 26, 2017
Three former senior executives of Tesco accused of fraud and false accounting at Britain’s biggest retailer appeared on Monday in a London court.
Christopher Bush, who was managing director of Tesco UK,Carl Rogberg, who was UK finance director, and John Scouler, whowas UK food commercial director, are all charged with one count of fraud by abuse of position and one count of false accounting.
They pleaded not guilty at a hearing on Aug. 3.
On Monday, the three defendants confirmed their names before the start of their trial at Southwark Crown Court. The case stems from an over-statement of Tesco’s profit forecast in 2014.
On Sept. 22, 2014, the group issued a statement to the London Stock Exchange saying that during its final preparations for an interim results announcement it identified a 250 million pound ($338 million) over-statement of its expected profit for the half year, mainly due to booking commercial deals with suppliers too early.
In the following weeks, the company suspended eight senior members of staff including Bush, Rogberg and Scouler. Tesco‘sshares tumbled and the company was plunged into the worst crisis in its near 100-year history.
Earlier this year, Tesco struck a so-called Deferred Prosecution Agreement to pay a 129 million pound fine to settle a probe into the scandal.
“The SFO’s (Serious Fraud Office) investigation into Tesco concluded in April 2017, when we entered into a DeferredProsecution Agreement. Over the last three years, we have fundamentally transformed our business,” Tesco said in a statement.
”Tesco today is a very different company. We are unable to comment further during the trial due to legal restrictions.”
Neil O’May of law firm Norton Rose Fulbright said Rogberg had always denied any wrongdoing.
“He will be vigorously contesting the charges to prove his innocence,” said O‘May.
Calls placed to lawyers for the other two defendants were not immediately returned.
The estimated profit over-statement, identified three weeks after Dave Lewis took over as Tesco chief executive from Phil Clarke, was later raised to 263 million pounds. Clarke had been fired due to the company’s poor performance.
No charges have been brought against Clarke.
The over-statement concerned guidance published by Tesco in a trading update on Aug. 29, 2014, downgrading its outlook.
According to the charges, Bush, Rogberg and Scouler concealed Tesco’s true financial position from its auditors and other employees between Feb. 1, 2014 and Sept. 23, 2014.
Bail was extended for the duration of the trial, which is expected to last until Christmas.
It was originally scheduled to start on Sept. 4 but was adjourned for legal reasons.
Jury selection will take place on Monday with opening arguments expected from Wednesday.
© Thomson Reuters 2023 All rights reserved.