Bentham Europe and Stewarts Law have announced that over 125 institutional funds have filed a claim for damages against Tesco for well in excess of £100m over alleged breaches of the Financial Services & Markets Act in relation to over-statement of earnings.
The legal action will seek to prove that Tesco made misleading statements to the stock market that omitted material information and which were relied on by investors when making investment decisions.
On 23 October 2014, Tesco announced it had previously over-stated its profits by £263m. The announcement, which was accompanied by a 92 per cent drop in interim profits, cut a further c. £1bn from Tesco’s market capitalisation (which had already reduced by c. £2bn following the initial disclosure to the market in September 2014).
The UK’s Serious Fraud Office has charged three former Tesco executives over the accounting scandal alleging that the men acted dishonestly by giving a false account of the commercial income earned by Tesco Stores and a false account of the financial position of Tesco. Christopher Bush, who was Tesco’s UK managing director; Carl Rogberg, former UK finance director; and John Scouler, who used to be UK commercial director for food, will stand trial at Southwark Crown Court in September 2017.
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