03:46, March 28 402 0 theguardian.com

2017-03-28 03:46:02
Tesco to pay £129m fine over accounting scandal

Tesco will pay a £129m fine after coming to a settlement with the Serious Fraud Office over its 2014 accounting scandal and has agreed to compensate shareholders with a further £85m.

The supermarket group said it had reached an in principle deferred prosecution agreement with the SFO over false accounting between February and September 2014. The SFO said Tesco would pay its costs in full.

The retailer will also pay about £85m in compensation, excluding interest, to those who bought Tesco shares and bonds between 29 August and 19 September 2014, in a separate agreement with the Financial Conduct Authority.

Each purchaser of shares during this period will receive 24.5p a share plus interest at 1.25% a year for institutional investors, or 4% a year for retail investors.

In a stock market announcement on Tuesday morning, Tesco said: “In making its finding, the FCA has expressly stated that it is not suggesting that the Tesco Plc board of directors knew, or could reasonably be expected to have known, that the information contained in that trading statement was false or misleading.”

Auditor KPMG has been appointed to administer the compensation scheme with oversight from the FCA, which has not imposed a penalty on Tesco.

Tesco said it expected to take a one-off charge of £235m to cover the penalty, compensation scheme and related costs.

The company said it had fully cooperated with the investigation and undertaken an “extensive programme of change” – to leadership, structures, financial controls, partnerships with suppliers, and the way the business buys and sells.

Tesco’s chief executive, Dave Lewis, said: “Over the past two-and-a-half years, we have fully cooperated with this investigation into historic[al] accounting practices, while at the same time fundamentally transforming our business.

“We sincerely regret the issues that occurred in 2014 and we are committed to doing everything we can to continue to restore trust in our business and brand.”

The agreement needs to be approved by a crown court at a public hearing on 10 April.