Tesco’s bosses in court over £250m fraud
THREE former Tesco executives appeared in court yesterday accused of “cooking the books” in a scandal which wiped £2billion off the supermarket’s total share value.
Chris Bush, 51, John Scouler, 49, and Carl Rogberg, 50, allegedly failed to correct inaccurately recorded income figures which were published to auditors, other employees and the wider market.
The prosecutor said the case amounted to “false accounting” by the trio, who received bonuses of more than £5million. Their actions sent “shockwaves” through the stock market.
The supermarket’s former finance chief, managing director and food commercial head, who are charged with fraud by abuse of position and false accounting between February and September 2014, were investigated after Tesco was found to have inflated its profits.
The supermarket made a public announcement to the stock market on September 22, 2014, which stated that it had previously over-estimated its profits by £250million, Southwark Crown Court in London heard.
Sasha Wass QC told the jury: “Each of the defendants was aware that this would lead to the company looking financially healthier than it actually was and it would result in Tesco’s trading profits being overstated. This, say the prosecution, was clearly dishonest.”
Bush, of High Wycombe, Buckinghamshire, Scouler, of St Albans, Hertfordshire, and Rogberg, of Chiselhampton, Oxfordshire, all deny the charges. Ms Wass said: “These defendants encouraged the manipulation of profits and indeed pressurised others working under their control to misconduct themselves in such a way that the stock market was ultimately misled.”
Ms Wass said those who objected to the practice within the organisation were bullied and forced to continue. The court heard that Rogberg, who was “directly responsible” for authorising the falsified figures, received a remuneration package of more than £1million in 2014.
Bush, who was in charge of the performance and “integrity” of Tesco at the time, received nearly £3million that year, while Scouler, who allegedly directed those beneath him to falsify income figures, received around £1.5million.
Ms Wass said Tesco was operating in “challenging trading conditions” and “failure was not looked on kindly”.
She added: “Each defendant would have had a very personal interest in keeping the share value of the company high, because a lot of their remuneration package included shares.”
Ms Wass said figures were “window-dressed” to make it look as if targets were being met. Some employees felt so compromised that they resigned rather than remain involved.
The trial continues.
Former Tesco executives, from left, Chris Bush, John Scouler and Carl Rogberg are charged with false accounting