Today, two of the former directors of Tesco faced a court trial over the allegations that they manipulated the figures that resulted in the 2014 accounting scandal of the supermarket chain that wiped off approximately £2 billion from the share price of the company.
The former UK managing director of Tesco, Christopher Bush, and the former UK food commercial director, John Scouler, have each been indicted with one count of fraud and false accounting.
Carl Rogberg, the former UK finance chief who has been charged with the same offences, was not able to attend the said hearing since he is not well enough to stand in court after suffering a heart attack earlier in the year.
The Serious Fraud Office (SFO) is prosecuting the said case. It charged the three men last September 2016. Once they are convicted, they would likely face a maximum of 10 years in prison. All of the three men has since denied the charges.
During the hearing that was held today in Southwark crown court, Sasha Wass QC described Scouler and Bush as “generals” who pressured the “foot soldiers” who are working beneath them to incorrectly book the statements from suppliers in an attempt to hit their targets and improve the appearance of the financial position of Tesco.
The said scandal kicked off in August 2014 when Tesco reported a trading update that stated that profits for the first half of the year were potentially to be in the region of £1.1 billion. Months later, the company said that there had been an overstatement in profit expectations by approximately £263 million, a figure that was later changed up to £284 million.
The numbers had been flattered by the early recognition of payments from the suppliers who sell their goods in the stores of the supermarket, as well as delays in charging costs.
In March of 2017, the supermarket behemoth agreed to pay fines and compensation for investors amounting to £214 million in order to settle with the SFO and the Financial Conduct Authority.