Nov 2, 2017

Tesco chief describes ‘shock’ at false accounting claims

Dave Lewis has told of his "Surprise" and "Shock" when, three weeks into his job as Tesco's chief executive, he was hauled out of a meeting by the supermarket's top lawyer and shown a document that is now at the centre of one of Britain's highest-profile prosecutions for fraud. Tesco issued a correction to the stock market in September 2014 saying it had overstated its profits, and three former executives are now on trial - Carl Rogberg, 50, Christopher Bush, 51, and John Scouler, 49. Mr Lewis said that by the time he started at Tesco, he had already learnt from chairman Sir Richard Broadbent of internal disagreements over profit targets. While his predecessor as chief executive, Philip Clarke, had believed a profit target of £2.8bn "Was still achievable" for 2014-15, other top managers persuaded the board to tell investors to expect between £2.4bn and £2.5bn. The ensuing profit warning, in August 2014, prompted Mr Lewis to scrap a planned holiday to start a month earlier than planned. Investors were told the following Monday that Tesco had overstated its expected profits by £250m. The trial continues.

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