Proactive Investors - Run By Investors For Investors

Two former Tesco bosses cleared of fraud charges as case collapses

Chris Bush and John Scouler walked free from Southwark Crown Court on Thursday, having previously been accused of failing to correct inaccurate income figures at the supermarket
Tesco store
In September 2014, Tesco revealed that it had overstated its profits by £250mln, wiping £2bn off its value

Two former executives of FTSE 100-supermarket chain Tesco PLC (LON:TSCO) have been cleared of charges involving a £250mln fraud and accounting scandal after the case against them collapsed.

The executives, Chris Bush and John Scouler, walked free from Southwark Crown Court on Thursday having previously been accused of failing to correct inaccurate income figures at the company which were then published to auditors, the market, and employees.

READ: Former Tesco directors go on trial over alleged profit overstatement

After it was uncovered, the scandal wiped around £2bn from Tesco’s value as it revealed in September 2014 that it had overstated its profits by £250mln (although it was later revealed that profits had been overstated by £284mln).

Bush served as Tesco’s UK managing director at the time of the scandal, while Scouler had served as UK food commercial director.

READ: Patisserie Valerie owner appoints interim CFO after suspended CFO quits amid accounting scandal

The trial was formally halted after the judge's decision to throw out the case was upheld by the Court of Appeal, with Judge Sir John Royce telling the court that in "certain crucial areas" the prosecution's case was "so weak that it should not be left for a jury's consideration".

He added that the "real weakness" was the question of proving knowledge.

In a statement, Bush said he was "delighted that my innocence had finally been established, it is troubling that Mr Scouler and I were ever charged".

He added: "Put simply, these charges should never have been brought, and serious questions should be asked about the way in which the [Serious Fraud Office] has conducted this investigation".

The collapse of the trial follows a more recent accounting scandal for Patisserie Valerie parent Patisserie Holdings PLC (LON:CAKE), which was saved from the brink of collapse after uncovering a black hole in its finances, followed by the arrest of its finance chief for fraud shortly after.

In early afternoon trading Thursday, Tesco shares were down 1.7% at 195.5p.

--Adds statements and updates share price-- 

View full TSCO profile View Profile

Tesco Timeline

Related Articles

December 03 2018
“I think customers are seeing that we do offer value and that really is the answer,” said chief executive John Nichols
December 18 2018
MetroRod has been in operation for 30 years but only became a franchise relatively recently
Scans and MRI
November 28 2018
The firm's subsidiary, Imaging Biometrics, recently appointed a South Korean distributor a few weeks after receiving the first commercial order for its StoneChecker technology

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use