A top lawyer who defended the last change of ownership of Liverpool Football Club has been retained by Tesco shareholders who claim they were misled over the supermarket’s £326m profits misstatement.
The Tesco Shareholder Claims (TSC) group, backed by US law firm Scott + Scott, said it had a strong case that will involve a “substantial claim”.
The group, which was launched in March, said the revenue overstatement last year had caused a permanent destruction of value to shareholders.
It said when the misstatement was admitted on September 22, shares fell to a 14-year low of 164.8p, although they have since recovered to around 215p.
The group claim is expected to be in the region of 50p to 70p a share. Tesco has over eight billion shares listed, which means the proposed claim could run into billions of pounds.
Tesco declined to comment.
The scandal, which involved rebates from suppliers being brought forward in the company’s accounts, came just as new chief executive Dave Lewis took over, after sliding sales prompted the departure of predecessor Philip Clarke.
John Bradley, chairman of TSC, said: “With the benefit of the advice received from Philip Marshall QC we believe we have a strong case and we wish to pursue it vigorously.”
Among a number of high-profile cases Mr Marshall, of Serle Court Chambers, defended the 2010 sale of Liverpool to Fenway Sports Group (then called New England Sports Ventures) against a challenge from former owners Tom Hicks and George Gillett.
TSC added the group is gathering the backing of an increasing number of institutional shareholders, although it declined to name them.
Last September the misstatement was estimated at £250m, was later revised up to £263m, and is now put at £326m.
The Serious Fraud Office is looking into the affair, while the Groceries Code Adjudicator and the Financial Reporting Council have also launched probes into the matter.
The TSC said: “What has since emerged is strong evidence that, from as early as 2011, the business was under ever increasing pressure to maintain financial performance, and to inflate its publicly reported profits so as to avoid having to report the true extent to which the business was beginning to underperform.”
Last month, Tesco posted a £6.4bn annual loss after taking a massive writedown on the value of its property portfolio.
TSC said it plans to formally file its claim later this year.