Suspended Tesco chiefs to leave next week with more to follow

Exclusive: Supermarket’s woes deepen as frantic search begins to replace all eight directors under internal investigation

Simon Neville
Friday 28 November 2014 03:23

All eight Tesco directors suspended as part of the supermarket’s £263m accountancy scandal are expected to be dismissed or made to leave as early as next week, with further suspensions highly likely, The Independent understands.

The focus of ongoing internal investigations has now switched to the finance and accounting departments, which would have worked closely with the commercial division where the suspended staff were employed.

Finance bosses working with the groceries business may also be asked to step aside next week as the new chief executive Dave Lewis has started thinking of new candidates to fill some of the most senior positions in the supermarket and to begin implementing his plans to turn round the business.

Mr Lewis is also understood to be looking for a new auditor to replace PwC after the firm’s bean-counters failed to spot the irregularities.

The eight directors suspended after the profit overstatement were Chris Bush, UK chief executive; Carl Rogberg, UK finance director; Kevin Grace, commercial director; John Scouler, food commercial director; Matt Simister, head of sourcing; Dan Jago, director of beers and wines; William Linnane, director of impulse purchases; and Sean McCurley, director of convenience.

The two most senior roles were then taken by Robin Terrell, who is interim UK boss, and Jason Tarry, who took the position of UK food commercial director.

However, it is thought that Mr Terrell will return to his previous position as head of multimedia at the company, with Mr Tarry or the chief customer officer Jill Easterbrook most likely to fill the potentially vacant UK chief executive position.

The Independent has previously revealed that the sacked former chief executive Phil Clarke and former finance director Laurie McIlwee are likely to have their legal fees covered by Tesco in any possible legal action. It is thought that even if the eight suspended directors are sacked, they too will be covered thanks to a legal indemnity clause in their contracts.

A handful of law firms are already considering taking action against the company for providing false information to the stock market, following the revelations that Tesco directors had been booking payments from suppliers into the wrong reporting periods for at least three years.

Mr Clarke and Mr McIlwee have both had their payoffs from the business frozen while the Serious Fraud Office conducts an investigation into the scandal.

A search is still on for a new chairman after Sir Richard Broadbent fell on his sword, with several analysts and commentators tipping the former Asda boss Archie Norman as the favourite to succeed him.

Mr Lewis is also thought to be working on plans for stopping a decline at the company that has seen market share fall to decade lows and shares slump 50 per cent this year.

He is expected to launch a full-scale price war against the discounters Aldi and Lidl, with signs seen in stores that clearer pricing has already been implemented.

A review of Tesco’s additional businesses is also under way, with its online music streaming firm Blinkbox the most likely for the chop.

The scandal was first uncovered by a whistleblower in the company’s accounting department and brought to the attention of Mr Lewis, who immediately suspended four directors.

The same whistleblower is also thought to have brought the problems to the attention of Mr Clarke during his time as chief executive, but the concerns were not followed up.

Tesco declined to comment.

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