The trial of three former senior executives of Tesco who are accused of fraud and false accounting has been adjourned.
Former managing director Christopher Bush, ex-UK finance director Carl Rogberg and John Scouler, who was UK food commercial director, are all charged with one count of fraud by abuse of position and one count of false accounting. The case has been adjourned until September 25.
The case is the result of Tesco’s overstating its profit forecast in 2014. In September 2014, Tesco told the London Stock Exchange it had identified a £250M overstatement of its expected profit for the half year.
The supermarket giant then suspended eight senior members of staff, including the three now on trial.
Aziz Rahman, founder of Rahman Ravelli, believes the case raises issues that go beyond the conduct of the three men on trial.
He said: ”We have a situation where one of the UK’s largest and most well-known companies has been wrongly reporting its profits on a massive scale. At this stage, we are still waiting to see what the outcome of the trial is regarding these three men.
“But since the problems came to light, Tesco has had to scrutinise very closely every aspect of its accounting procedures. It has paid a heavy price in terms of loss of reputation, falling share value and the financial penalties it has had to pay. It has avoided a criminal prosecution by obtaining a deferred prosecution agreement but it can hardly be said to have got off lightly.
“Such problems could have so easily been avoided if it had had proper procedures in place to allow any suspicions of wrongdoing to be raised early and acted on as soon as possible.
“What happened to Tesco is a high-profile warning to everyone in business: make sure your compliance procedures are fit for purpose.’’
Read our article: TESCO: A QUESTION OF CORPORATE CRIMINAL LIABILITY?