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Tesco faces legal action from investors who claim to have lost £150 million

Published 03/10/2016

Tesco suspended eight directors
Tesco suspended eight directors

Tesco is facing legal action from a group of 60 large investors who claim to have lost £150 million following the supermarket's accounting scandal two years ago.

Bentham Europe is funding the move on behalf of the grocer's shareholders, with lawyers set to file a claim before the end of October.

Tesco suspended eight directors and was hit with investigations from the Financial Conduct Authority (FCA) and the Serious Fraud Office (SFO) after it was found to have inflated profits by £326 million in 2014.

Jeremy Marshall, chief investment officer of Bentham Europe, said the overstatement of earnings had caused "significant harm" to Tesco's shareholders who bought stock since April 17, 2013.

"Shareholders are justifiably concerned that Tesco has misrepresented its earnings resulting in material losses.

"We expect the legal claim to reveal the true extent of the problem and allow shareholders to seek compensation for harm suffered."

The claim aims to discover whether Tesco shareholders should receive compensation for losses triggered by the grocer's alleged breaches of the Financial Services and Markets Act, according to Bentham Europe.

It added that more shareholders were likely to come forward once the claim is filed.

Tesco, which has seen its share price fall more than 20% in the past two years, declined to comment.

Britain's biggest grocer posted bottom-line pre-tax profits of £162 million for the year to February 27 against losses of £6.3 billion the previous year - one of the biggest losses in UK corporate history.

The SFO said its investigation in to the supermarket was ongoing.

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