NEWS

£129m fine for Tesco over accounting irregularities

Published on: 11th April 2017

The case will not now go to court.

Tesco480The high court has approved a settlement between Tesco and the Serious Fraud Office, although reporting restrictions mean the reasons behind the judgment and details about the SFO’s investigation cannot be published. Sir Brian Leveson approved the so-called deferred prosecution agreement (DPA) at a hearing on Monday.

DPAs, which were originally introduced in the UK three years ago, allow a company to suspend a prosecution in return for meeting specified conditions, such as paying a fine and demonstrating that its culture has changed. Entering into a DPA does not require an admission of wrongdoing.

Tesco admitted in 2014 that it had overstated profits by £326m, a situation which was linked to how it booked payments from suppliers. The ruling means that Tesco will pay out £235m to settle investigations into the 2014 accounting scandal. As well as the £129m, it has separately agreed with the Financial Conduct Authority to pay about £85m in compensation to investors affected by a 2014 trading statement that overstated profits. Tesco will also pay legal costs associated with the agreements.

Dave Lewis, the chief executive of Tesco, said last month that the settlement allowed the company to move on, commenting: “I want to apologise to all those affected. What happened is a huge source of regret to us all at Tesco, but we are a different business now.”

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