Former Tesco executive Carl Rogberg cleared over £250m fraud and false accounting scandal

Former UK finance director acquitted after high-profile Serious Fraud Office case collapses

It marks the end of criminal proceedings against three Tesco executives accused over their roles in a 2014 accounting scandal (AP)

A former Tesco executive has been cleared over a fraud and false accounting scandal that saw the company overstate its profit forecast by £250m.

Tesco’s former UK finance director Carl Rogberg was cleared of all charges at Southwark Crown Court on Wednesday after the Serious Fraud Office presented no evidence against him.

Mr Rogberg, 52, was accused of knowing that income was being wrongly included in records to meet targets and make the company look financially healthier than it was.

It marks the end of criminal proceedings against three Tesco executives accused over their roles in a 2014 accounting scandal that saw 12 per cent wiped off the company’s value.

Mr Rogberg had been too ill too attend court last month when former UK managing director Chris Bush and former UK food commercial director John Scouler were cleared of all charges due to a lack of evidence.

Despite all three men being cleared, Tesco agreed to pay a £129m fine for falsely overstating its income in 2014 by hundreds of millions of pounds in a settlement with the SFO.

Details of the Tesco’s Deferred Prosecution Agreement (DPA), which was agreed in 2017, could only be reported on Tuesday after the collapse of the criminal case.

It leaves an unprecedented scenario in which Tesco has agreed to pay a fine for a £233m hole in its accounts in an agreement that names the three executives, yet in the parallel criminal case judges have said they have no case to answer due to lack of evidence.

Mr Rogberg said Tesco had failed to properly investigate the alleged fraud “from the outset” and had entered into a DPA “on a completely false basis”.

A DPA is a relatively new option for prosecutors in the UK which allows them to reach an agreement with a company without going to a potentially time consuming and expensive trial. But their use is controversial as it means companies are not convicted, even when wrongdoing may have occured.

Mr Rogberg, who suffered a heart attack last year, said of the DPA that it was a “worthless and dishonest piece of paper with no credibility”.

“The trial has had enormous consequences on my health and exemplary career, as well as for my wife, my son, my family and my friends,” he added.

Lawyers for the three men said the cased raised serious concerns about the SFO’s handling of high-profile fraud investigations and the use of DPAs.

Acting for Mr Rogberg, Neil O’May of Norton Rose Fulbright said: “This is more than simply an acquittal by a jury. It is a finding that there was insufficient evidence on which the case could have been brought. This is unprecedented in high-profile serious fraud cases.

The SFO failed to appoint independent forensic accountants to assess whether fraud had actually taken place, Mr O’May said.

Mr Bush’s lawyer Ross Dixon, of Hickman & Rose, said the three men have had their names “besmirched” by the case which “exposes a fundamental unfairness with Deferred Prosecution Agreements and sounds an alarm call for anyone concerned with the proper functioning of the criminal justice system”.

He added: “We now have two contradictory outcomes: that of the criminal trial in which the allegations were dismissed for lack of evidence, and the DPA, based on the same allegations, which tells a different story.

“The discrepancy between these outcomes is deeply worrying and should particularly concern senior executives working for a company under investigation by the SFO.

“They may find themselves, as in this case, acquitted of wrongdoing yet have their reputation publicly besmirched in an agreement between the SFO and the company under investigation.

“The problem stems from the fact that while DPAs are seen as a great outcome for the SFO, there is a risk that in pursuit of this goal, the SFO has little incentive to properly test the assertions on which it is based.”