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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.

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