Trial adjourned for Tesco senior executives at centre of accounting scandal

Three of Tesco's senior executives concealed the true financial position of the company

Christopher Bush, former Tesco UK managing director, pleaded not guilty to false accounting and abuse of his position in a hearing on Sunday

(Reuters)

The trial of three former senior executives at Tesco accused of fraud and false accounting was adjourned on Monday until 25 September.

Christopher Bush, who was managing director of Tesco UK, Carl Rogberg, who was UK finance director, and John Scouler, who was UK food commercial director, are all charged with one count of fraud by abuse of position and one count of false accounting at Britain’s biggest retailer.

All three pleaded not guilty at a hearing on Sunday.

The case stems from an overstatement of Tesco’s profit forecast in 2014.

On 22 September 2014 the group issued a statement to the London Stock Exchange saying that during its final preparations for an interim results announcement it identified a £250m overstatement of its expected profit for the half year, mainly due to booking commercial deals with suppliers too early.

In the following weeks the company suspended eight senior members of staff including Mr Bush, Mr Rogberg and Mr Scouler.

Tesco’s shares tumbled and the company was plunged into the worst crisis in its near 100-year history.

The estimated profit overstatement, identified three weeks after Dave Lewis took over as Tesco chief executive from Phil Clarke, was later raised to £263m. Clarke had been fired due to the company’s poor performance.

The overstatement concerned guidance published by Tesco in a trading update on 29 August 2014, downgrading its outlook.

According to the charges, all three men concealed Tesco’s true financial position from its auditors and other employees between 1 February 2014 and 23 September 2014.

Reuters