Tesco has another battle on its hands after a group of shareholders has emerged seeking compensation for overstated profits.
The group is a non-profit organisation under the name Tesco Shareholders Claims Limited. It has full funding from a US law firm, Scott+Scott LLP, for action over Tesco’s announcement in September last year that it materially overstated its profits, causing a crash in share value.
In the 'black hole' scandal, Tesco announced on 22 September 2014 that it had overstated its expected profit for the half year by £263 million.
In November, Stewarts Law announced that it was bringing action against Tesco on behalf of another group of shareholders.
The shareholders believe that had the accounting irregularities not taken place the share price, and value of the company, would today be materially higher. It expects the claim to be in the region of 50p-70p per share. Tesco has in excess of 8 billion shares listed.
The group is appealing to other shareholders who bought shares in Tesco prior to the announcement to join the claim.
Chairman of the group, John Bradley, said Tesco is one of the widest held stocks in the UK. “This loss has hit pension funds and investors across the UK and beyond. We look forward to bringing this claim to court,” Bradley said.
Tesco declined to comment.