Fraud case against former Tesco directors collapses
Two former directors of Tesco were acquitted on Thursday of fraud and false accounting at Britain’s biggest retailer following a 2014 scandal.
Christopher Bush, who was MD of Tesco UK, and John Scouler, who was UK food commercial director, had been accused of cooking the books to support the shares and secure huge compensation packages.
However, judge John Royce told a jury at London’s Southwark crown court that the men had been acquitted by the court of appeal on Wednesday after it upheld his ruling that the prosecution case was too weak for the case to continue. “I concluded in certain crucial areas the prosecution case was so weak it should not be left for a jury’s consideration,” he said.
Bush and Scouler were charged in September 2016 with one count of fraud by abuse of position and one count of false accounting. A first trial was abandoned in February, shortly before the jury was due to retire to consider its verdict.
The retrial had been running since October.
The case stems from an overstatement of Tesco’s profit forecast. On September 22 2014, the group issued a statement to the London Stock Exchange saying that during its final preparations for an interim results announcement, it had 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, Tesco suspended eight senior members of staff, including Bush and Scouler. Its shares tumbled and the retailer was plunged into the worst crisis in its nearly 100year history.
The profit forecast overstatement, identified three weeks after Dave Lewis took over as CEO from Philip Clarke, was raised to £263m. The forecast related to guidance published by Tesco in an update on August 29, 2014, downgrading its outlook.
The verdict is a huge blow for Britain’s Serious Fraud Office, which launched its Tesco investigation in October 2014.
Tesco has said it is a different company now, having transformed its business since 2014 under Lewis.