No red flags were raised, says Tesco ex-chairman
LONDON: The former chairman of Tesco said he did not recall Carl Rogberg, finance director of its British operations, raising any red flags in the summer of 2014 to indicate that the retailer was likely to miss profit forecasts.
Richard Broadbent, who chaired Tesco from 2011 to 2015, was giving evidence at the trial of Rogberg and two other former senior executives of Britain’s biggest retailer, who are accused of fraud and false accounting in 2014.
Rogberg, who was United Kingdom finance director, Christopher Bush, who was managing director of Tesco UK and John Scouler, who was UK food commercial director, all deny any wrongdoing and have pleaded not guilty.
The case centres on Tesco’s September 22, 2014 announcement to the stock exchange that its profit forecast had been overstated by £250 million (RM1.37 billion), mainly due to booking commercial deals with suppliers too early.
Tesco’s disclosure that day saw its shares tumble and plunged the company into the worst crisis in its near 100-year history.
Lead prosecutor Sasha Wass told the court last month that all three defendants were well aware that a hole in Tesco’s accounts was “spiralling out of control” in the first half of 2014 but connived to conceal their failure to meet targets.
Rogberg was a member of a committee that was overseeing Tesco’s finances until a new finance director joined in September 2014, the court was told.
Broadbent said he did not recall Rogberg raising any concerns about profit targets at an August meeting of the committee.
He said he “certainly didn’t recall being told” there were any issues that indicated the targets would not be met.
Broadbent told the court he was aware that trading conditions were tough, and he said he also “would have been interested” if Christopher Bush had raised any concerns about the forecasts to him”.
“I don’t have a recollection of Chris saying to me that we are going to miss those targets,” he said.
The court has previously heard that Amit Soni, a senior accountant at Tesco who is described by the prosecution as a whistleblower in the case, had commissioned a detailed report which showed how around £250 million of income had illegitimately been “pulled forward” in Tesco’s accounts. Reuters