Nov 2, 2017

Tesco fraud trial hears of boss's shock over misstated profits

Tesco's chief executive has told a court of his "Surprise and shock" on learning the company's profits had been misstated by £246m. David Lewis was told about the issue just weeks after he took up the post in September 2014. Mr Lewis has been giving evidence at the trial into alleged fraud at the supermarket giant. Sir Richard returned from Italy, where he had been on holiday, and it was discovered by the end of the weekend that the shortfall was £263m. Mr Lewis went on to explain the company had spent a great deal of time between Tesco's public announcement on 22 September stating profits had been overestimated, and when the company was due to issue its interim results on 23 October. It required a huge amount of review of paperwork, documentation between pretty much all of the suppliers to Tesco and the different categories in order to validate the number. Problems with Tesco's accounts came to light in a regulatory announcement in September 2014, when Tesco shocked the market in admitting it had overstated profits by around £250m. Tesco has said it had incorrectly booked payments from its suppliers and has paid £85m in compensation to investors who lost out when the share price fell in the wake of the accounting revelations.

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