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A British retail industry watchdog rapped Tesco (LON:TSCO) over the knuckles on Tuesday for putting profits over the interests of its suppliers.
The Groceries Code Adjudicator ruled that the supermarket group knowingly delayed payments to suppliers to improve its own financial position in tough markets.
The ombudsman's Christine Tacon said Tesco had adopted unreasonable practices and behaviours including lengthy and widespread payment delays.
"I was also troubled to see Tesco at times prioritising its own finances over treating suppliers fairly," she was reported as saying.
The GCA launched an inquiry into Tesco last February after the emergence of news in 2014 that Tesco had overstated profits by £263mln.
The Serious Fraud Office (SFO) is now conducting an investigation into the accounting errors.
The GCA found that Tesco had breached its code and ordered the company to introduce significant changes, including preventing Tesco from making unilateral deductions from money owed for goods.
New chief executive Dave Lewis, who replaced ousted predecessor Philip Clarke in mid-2014, apologised for the breach.
He said the chain had already launched a shake-up including reorganising, refocusing and retraining its teams and would abide by the GCA's recommendations.
Lewis has been battling to turn round the fortunes of Tesco, which issued a string of profit warnings a couple of years ago after being hit by competition from discounters.
Earlier this month, signs that the recovery drive was paying off emerged as Tesco reported its first group like-for-like sales increase for more than four years.
Shares in the retailer rose 4.35p to 160.05p following the news.
Hargreaves Lansdown senior analyst Laith Khalaf said: "Tesco received a firm slap on the wrist today, and the supermarket may yet get a slap in the wallet for the accounting scandal which saw a £300mln black hole appear in its profits.
"The company is today being censured for the sins of the past, and with a new man at the top it is relatively easy for Tesco to draw a line under previous misconduct.
"Cantor Fitzgerald is suggesting Tesco could face financial penalties in excess of £500mln for its accounting misdemeanours, pending the publication of the forthcoming SFO investigation.
"This would be a significant blow given current trading conditions, though operationally there are some hints that the supermarket is beginning to turn the corner after a positive Christmas trading period.
"The company is not out of the woods yet, but has at least started on the slow path of recovery."
Supply chain expert at Warwick Business School, Mark Johnson, said companies had long known that they could manipulate payment terms and order dates to make their accounts look healthier than they are.
He added: "By delaying payments, firms appear more liquid - or cash-rich - and also more profitable if it is done at certain points in the financial reporting cycle. Retailers such as Tesco are among the most liquid as they can delay payments to suppliers while also receiving payment from customers almost instantaneously.
"This can have a significant impact upon smaller suppliers who are often paid up to two months later and in some cases significantly longer."