Tesco accounting scandal: investors urged to make a damages claim
In March this year Tesco was fined £129m by the Serious Fraud Office following a probe by regulators into over statement of profits in 2014.
The Financial Conduct Authority (FCA) said Tesco had agreed it committed market abuse in relation to a trading update published on 29 August 2014, which gave a false or misleading impression about the value of publicly traded Tesco shares and bonds.
The regulator subsequently announced a compensation scheme for all those investors who made a loss in the time period between 29 August 2014 and 19 September 2014. It estimated that 10,000 retail and institutional investors would be eligible for redress, with compensation set at 24.5p per share plus interest of 1.25% per year for institutional investors and 4% for retail investors.
However, according to Rosenblatt Solicitors this compensation doesn’t go far enough as Tesco overstated profits in various reporting periods between 2013 and 2015 and investors suffered economic losses through buying shares and/or bonds at inflated prices during this time.
As such, it’s inviting retail investors to come forward as potential claimants for a group action against Tesco. Rosenblatt confirms there is no initial cost to investors in coming forward, and said there will not be any additional charges if the case ends up going to court. It will compile a list of potential claimants over the next six weeks and once a large enough claim value has been established it hopes to gain litigation funding to fund the proceedings.
The law firm says that institutional investors have already filed a lawsuit against Tesco for damages.
Tania MacLeod, managing partner at Rosenblatt Solicitors, said: “We believe the FCA compensation scheme does not extend far enough. What is beyond doubt is that, even on the findings of Tesco’s own investigation, the reporting of its financial information was overstated long before 29 August 2014 and thus there is a likelihood that investors bought stock at inflated prices going back to at least 2013.
“If you are a retail investor and bought and/or sold Tesco shares or bonds during this period, and are interested in being part of a group to bring a claim, contact Rosenblatt.”