Belfast Telegraph

Victims of Tesco scandal focus on firm's Irish arm

Tesco told the stock market in September 2014 that it had identified a £250m overstatement of its expected profit for the half-year period (Nick Ansell/PA)
Tesco told the stock market in September 2014 that it had identified a £250m overstatement of its expected profit for the half-year period (Nick Ansell/PA)

By John Mulligan

Burnt investors seeking as much as $800m (£611m) in damages after the Tesco accounting scandal have honed in on the retail giant's Irish arm.

Records related to Tesco's Republic of Ireland operation are one of the key focal points for dozens of institutional claimants seeking damages following the accounting scandal that sent shockwaves through the financial markets in 2014.

Claimants have already secured access to some documents that form part of a file called the Emerald Report, compiled by Deloitte in relation to Tesco's Irish operations.

The claimants asked the High Court in London for access to additional documentation written prior to the preparation of the Emerald Report in 2015, which the court has now instructed Tesco to search for on behalf of the claimants. The case is expected to go to trial next year.

The claimants have contended that Tesco executives may have been aware of alleged income overstatements at its Irish arm in advance of the accounting issues being made public.

Tesco told the stock market in September 2014 that it had identified a £250m overstatement of its expected profit for the half-year period due primarily to booking commercial deals with suppliers too early. It precipitated a major crisis for the retailer.

The forecast overstatement was identified by Dave Lewis a number of weeks after he took over as chief executive from Philip Clarke.

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While the case against Tesco by investors in the group is not due to go to trial until next year, there have been various hearings held in relation to discovery in the case.

Belfast Telegraph

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