‘False accounting on industrial scale took place at Tesco’ – court
FALSE ACCOUNTING at Tesco took place on an industrial scale, leading to a £250m overstatement of the company’s profits, a court has heard.
Two former directors at the supermarket chain have gone on trial accused of fraud.
The firm’s shares plummeted by nearly 12 per cent, wiping £2bn off the share value, when Tesco announced in September 2014 that a statement the previous month had overstated profits by about £250m.
Chris Bush, ex-UK managing director, and John Scouler, the then-UK food commercial director, were aware that income was being wrongly included in the company’s financial records to meet targets and make Tesco look financially healthier than it was, Southwark Crown Court heard.
Bush and Scouler were described as “generals”, with those working below them referred to by prosecutor Sasha Wass QC as “foot soldiers” who, she said, were “pressurised and coerced” into carrying out a practice of “pulling forward” profits before they had been earned.
The jury was told the case is a retrial, and that a third man, former UK finance director Carl Rogberg, is charged with identical offences but is not currently well enough to stand trial.
Ms Wass said: “The prosecution case, in a nutshell, is that the defendants, together with Mr Rogberg, were aware that income was being wrongly included in the financial records of the company which were used to inform statements to the stock market.
“They were aware that this was being done in order to meet targets so that the company would look financially healthier than it was.
“They were aware that this wrongly included income would result in Tesco’s trading profit and share price being overstated.”
Scouler, 50, of The Park, St Albans, and Bush, 52, of Four Acres, Green End Road, Radnage, High Wycombe, each deny one count of fraud and another of false accounting and are on bail. The trial is expected to last three months.