Tesco £250m accounting scandal probe dropped
The Tesco accounting scandal resulted in it overstating profits by £250m in its market trading statement published in September 2014.
After issuing a corrected trading statement a month later, Tesco was subsequently fined £129m by the Serious Fraud Office and a compensation scheme was launched by the Financial Conduct Authority for all investors who overpaid on shares due to the inaccurate report.
The Financial Reporting Council (FRC) – the investigative and disciplinary body for accountants and actuaries – launched an investigation in December 2014 in a bid to find out how profits were overstated in the financial years ended 25 February 2012, 23 February 2013 and 22 February 2014.
It also sought to find out how the financial information was prepared and approved in relation to the publication of Tesco’s interim results on 23 October 2014.
However, after a five year investigation, the FRC has today confirmed it has decided to drop the probe.
A statement read: “During the course of the wider investigation, a number of accountant employees within Tesco were added as subjects. The investigation into these individuals was subsequently paused pending the Serious Fraud Office’s (SFO) trial of three (non-accountant) senior Tesco employees on charges relating to the overstatement.
“Following the conclusion of the SFO proceedings, and consideration of relevant material and information subsequently obtained from the SFO, Executive Counsel has decided to discontinue the matters in relation to each of the remaining subjects. Accordingly, the matter has been closed without service of a Formal Complaint.”