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Act now: final day for Tesco shareholders to submit compensation claim

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Written by: Paloma Kubiak
22/02/2018
Thousands of Tesco bond and shareholders entitled to compensation following its over-statement of profits in 2014 have just hours left to submit a claim.

The deadline to claim compensation from Tesco is today – Thursday 22 February 2018 – and an estimated £85m plus interest is expected to be paid out.

Around 10,000 Tesco shareholders are entitled to compensation, set at a rate of 24.5p per share plus interest of 4% for retail investors (1.25% for institutional investors).

The scheme was announced by Tesco PLC with the agreement of the regulator, the Financial Conduct Authority (FCA) on 28 March 2017. It relates to Tesco’s inaccurate trading statement of 29 August 2014 regarding its profit outlook for 2014/15. This outlook was corrected on 22 September 2014.

Investors who bought Tesco PLC shares or certain Tesco listed bonds between 29 August 2014 and 19 September 2014 are eligible for the compensation. Claims need to be made directly via the administrator’s KPMG Tesco compensation link.

If you don’t submit your claim by 11:59pm on the 22 February 2018 cut-off point, you’ll lose all rights to the compensation.

More on claiming Tesco compensation

You’re eligible for compensation if you bought Tesco ordinary shares or certain Tesco listed bonds during the specific dates as above. Where you are a ‘net purchaser’ – if you bought more shares/bonds in the period than you sold, you’ll only receive compensation if there is a genuine economic loss.

In order to claim, you will need to provide the following documents:

  1. Identification documents for individuals or authorised signatory list for entities;
  2. Bank account statement for the account to which you have requested any payments to be made; and
  3. Evidence of the transactions e.g. broker statements and contract notes.

Compensation will be paid differently in respect of shares held within ISAs and SIPPs. Generally, KPMG expects payments should be made around 35 days after claims are submitted.

Compensation for Tesco shares/bonds held in an ISA isn’t paid directly back into the ISA. However, the compensation can be paid in without the amount counting toward the annual ISA allowance. KPMG added that 20% of the interest portion of the compensation amount will be withheld.

In the case of SIPP investments, claims must be made by the pension trustees and action shouldn’t be needed by the investor. However, you should check with your pension company that this is being done. Compensation will be paid directly back into the SIPP and will not count towards your annual contribution allowance.

If the claimant has since died, the executor of the deceased’s estate can make a claim for compensation, KPMG confirmed.

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