The Serious Fraud Office has charged three former Tesco (LON:TSCO) executives with fraud following the profits warning in 2014 that plunged the supermarket chain into chaos.
Chris Bush, the head of the UK operation at the time, Carl Rogberg the former UK finance director and John Scouler the former UK food commercial director have all been charged with one count of abuse of position fraud and one count of false accounting.
All three executives left shortly after the appointment of Dave Lewis as chief executive in September 2014.
One of his first moves was to stun the City with a warning that profits had been overstated by £263mln. The SFO launched its investigation in October of that year.
The issue related to volume rebates paid to suppliers by Tesco, which became a problem when the supermarket giant failed to hit expected targets as sales slowed.
Tesco suspended eight executives, including the trio charged today, following the revelations. Sir Richard Broadbent, Tesco’s chairman at the time, also stood down.
Lewis has since instigated a widespread overhaul of Tesco that has seen sales stabilise and a raft of non-core businesses sold.
The three executive charged today are due to appear at Westminster Magistrates Court on 22 September, though the SFO added that investigation into Tesco remains ongoing.
In a statement Tesco said: “We note the decision of the SFO to bring a prosecution against former colleagues in relation to historic issues and acknowledge the investigation into the company is ongoing.
“Tesco continues to cooperate with the SFO's investigation. The last two years have seen an extensive programme of change at Tesco, but given this is an ongoing legal matter, we are unable to provide any further comment at this time.”
Phil Clarke, who was replaced as chief executive by Lewis, is believed to have been questioned a number of times during the course of the investigation.
Laurie McIlwee, who was chief financial officer at Tesco until April 2014, was recently cleared by accountancy watchdog the Financial Reporting Council of any wrongdoing while at the supermarket chain.
If the SFO does eventually decide to charge Clarke, observers say it is possible it will also charge the company itself though a settlement through a deferred prosecution agreement (DPA) is considered more likely.
That may mean a fine of up to £500mln.
Tesco shares fell 1% to 169.1p.