Former Tesco bosses Chris Bush and John Scouler cleared of £250m fraud after case collapses

Chris Bush, former UK managing director, and John Scouler, former UK food commercial director, cleared by Court of Appeal judges

Two former Tesco bosses have been cleared of all charges in a £280m fraud and false accounting scandal after the case against them collapsed.

Chris Bush, former UK managing director, and John Scouler, former UK food commercial director, were cleared by Court of Appeal judges on Wednesday because of a lack of evidence.

Judge John Royce told a jury at Southwark Crown Court of the decision on Thursday.

Mr Bush and Mr Scouler had been accused by the prosecution of "cooking the books" by failing to correct inaccurate income figures, which were then published to auditors, other employees and the wider market.

In August 2014 Britain's largest supermarket chain reported profits of £1.1bn but weeks later revealed to the stock market that the true figure was £250m lower. More than £2bn was wiped off the company's market valuation in the days after the announcement.

Tesco later found that profits had actually been inflated by £284m, thank to early recognition of payments and late charging of costs. The company axed PwC as its auditor of 32 years after details of the inaccuracies emerged.

Mr Scouler, 50, and Mr Bush, 52, each denied one charge of false accounting and one charge of fraud.

The verdict will deal a blow to the Serious Fraud Office (SFO) which brought the case against Tesco after a two-year investigation.

Responding to the verdict Mr Bush said he was delighted but added: "Put simply, these charges should never have been brought, and serious questions should be asked about the way in which the SFO has conducted this investigation.

"In my view, the SFO wholly failed to investigate this case thoroughly, independently or fairly from the outset."

Richard Sallybanks, partner at BCL Solicitors, representing Mr Scouler, also criticised the SFO's handling of the case.

"We have long argued that the SFO's prosecution of Mr Scouler was fundamentally flawed, that he should not have been charged, and that the SFO should not have proceeded with this trial."