Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

UK Watchdog Begins Investigating Tesco's Books

Published 10/01/2014, 04:56 AM
Updated 10/01/2014, 05:15 AM
UK Watchdog Begins Investigating Tesco's Books

UK Watchdog Begins Investigating Tesco's Books

By Sneha Shankar - The UK's Financial Conduct Authority, or FCA, has launched an in-depth investigation into last month's accounting error at Tesco (LONDON:TSCO), which led to an overstatement of expected profits for the world’s third-largest retailer. The mistake, which has been dubbed a scandal, wiped off more than $3 billion off the company’s market value after it was announced.

The company had announced on Sept. 22 that it had overstated its profit expectation for the first half of the year by 250 million pounds ($404 million). The retailer also announced that it will call in forensic accountants and lawyers to conduct an internal investigation into the matter, according to Reuters. The company has suspended four senior executives, including UK managing director Chris Bush.

“The Financial Conduct Authority (FCA) has notified Tesco that it has commenced a full investigation following the overstatement of expected profit for the half year which was described in our announcement of 22 September 2014 and which is currently the subject of an independent review by Deloitte,” the company said, in a statement Wednesday, adding: “Tesco will continue to co-operate fully with the FCA and other relevant authorities considering this matter.”

© Reuters/Stefan Wermuth. The Houses of Parliament are reflected in a Tesco sign in central London on Sep. 22, 2014.

The country's Serious Fraud Office had also stated that it is prepared to intervene if necessary while the Financial Reporting Council, the British accountancy regulator, had said that it was "monitoring the situation closely," but is waiting for Tesco to finish its internal investigation before beginning its own inquiry, BBC reported.

"It seems unbelievable that a retailing colossus like Tesco should not have a full-time finance director overseeing everything,” Adrian Bailey, chairman of the UK parliament, had said last month, reacting to the news of Tesco’s overstatement of its profits.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.