article: Its subsidiary, Tesco Stores Ltd, reached what's known as a deferred prosecution agreement with the Serious Fraud Office after a two-year probe. Tesco said there was "regret" over the issues of 2014 and said it has been working hard to "restore trust". The firm also agreed with the Financial Conduct Authority (FCA) to spend £85m on compensating investors. The money will go to those who bought shares or bonds between 29 August and 19 September in 2014. Those investors would have had misleading information from a trading statement on 29 August, which gave a rosier assessment of its performance than was actually the case. Tesco issued a corrected statement before the markets opened on Monday 22 September, which estimated it had overstated profits by about £250m. The revelation sent the retailer's share price plunging and sparked two internal inquiries. Even that was not the full story, the overstatement was subsequently revised up to £326m. The compensation order is a first for the FCA, although it has not imposed its own penalty, and Tesco has accepted the regulator's finding of "market abuse". The SFO said Tesco had co-operated with the investigation and had undergone an "extensive" period of change. Tesco's current chief executive, Dave Lewis, said: "Over the last two-and-a-half years, we have fully co-operated with this investigation into historic accounting practices, while at the same time fundamentally transforming our business. "We sincerely regret the issues which occurred in 2014 and we are committed to doing everything we can to continue to restore trust in our business and brand." A Deferred Prosecution Agreement (DPA) is a fairly new way (introduced in February 2014) of punishing a company for criminal behaviour without the collateral damage of a conviction. DPAs may be fairly new, but they are instruments the SFO is warming to. Just last month it announced a DPA with Rolls-Royce which saw the company pay a UK fine of £500m. In that case, the judge agreed that a criminal conviction for the company could disbar it from securing contracts - particularly in the US - which in turn could threaten the jobs of thousands of UK workers. A DPA also avoids lengthy and costly trials and puts the offending company on probation to ensure full co-operation in the future. It also does NOT mean that individuals escape scot free while shareholders pay the price for their conduct. Three former executives from Tesco face criminal proceedings. The SFO also quizzed the former chief executive Phil Clarke, before dropping any further action against him. Read more from Simon here: The DPA with Tesco Stores still needs approval by the High Court, which is scheduled to make its decision on 10 April. This potential DPA agreement only covers Tesco Stores and does not address whether liability of any sort applies to the larger international group Tesco plc or any of its employees. To pay for the penalty, compensation scheme and related costs Tesco will charge £235m to its results for the 2016-17 financial year, which are due to be published on 12 April. Tesco shares were
summary: Tesco has agreed to pay a fine of £129m to avoid prosecution for overstating its profits in 2014.