Tesco’s then UK managing director did not alert the British retailer’s chief executive to possible problems with its 2014-2015 half-year accounts, despite having opportunities to do so, a London court has heard.
Tesco chief executive Dave Lewis was giving evidence at the trial of three former senior executives of the UK’s biggest retailer who are accused of fraud and false accounting in 2014.
Christopher Bush, who was managing director of Tesco UK; Carl Rogberg, who was UK finance director; and John Scouler, who was UK food commercial director, all deny any wrongdoing and have pleaded not guilty.
The case centres on Tesco’s September 22, 2014 announcement to the London Stock Exchange that its profit forecast had been overstated by £250m (€280m), mainly due to booking commercial deals with suppliers too early. Lewis replaced Philip Clarke as Tesco chief on September 1, 2014. He said he first became aware of account issues on September 19 when he was notified by Tesco’s chief legal counsel Adrian Morris.
Lewis said he was presented with a paper which the court has heard was commissioned by Amit Soni, a senior accountant at Tesco who is described by the prosecution as a whistleblower in the case, and said he reacted with “surprise and shock”.
Lewis said that between joining Tesco on September 1 and notification on September 19 he had met Bush on a couple of occasions and there had also been executive committee meetings that Bush had attended, but no issues with the accounts had been raised. Tesco’s September 22 disclosure saw its shares tumble and plunged the company into the worst crisis in its near 100-year history.
Lead prosecutor Sasha Wass told the court last month all three defendants were well aware that a hole in Tesco’s accounts was “spiralling out of control” in the first half of 2014 but connived to conceal their failure to meet targets.
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