Tesco accounting snafu now subject of criminal probe

Now Reading:

Tesco accounting snafu now subject of criminal probe

Tesco accounting snafu now subject of criminal probe
Text size Aa Aa

A formal criminal investigation has been opened into accounting errors at Britain’s supermarket chain Tesco.

The UK’s Serious Fraud Office will look into the overstatement by 263 million pounds (334 million euros) of Tesco’s profits in the first six months of 2014.

The accounting irregularities were caused by putting deals with suppliers on the books too early.

The scandal led to the suspension of eight senior members of staff and hammered the company’s reputation sending its shares into freefall.

Tesco said the eight remain employees and have been asked to step aside while the matter is investigated, adding that there was no suspicion of wrongdoing.

When the SFO launches a full criminal investigation against a company or individuals it has to be satisfied that there are reasonable grounds to believe that conduct might involve serious or complex fraud or bribery.

Such investigations can take years to complete. The agency will initially spend months sifting through vast quantities of digital data and other evidence, while seeking to identify and trace witnesses.

Tesco is already facing at least investor lawsuit in the United States over the problem.

Britain’s accounting watchdog, the Financial Reporting Council, is also examining how the error came about.

with Reuters