Tesco is facing a claim for £150m from 60 shareholders seeking to recoup losses following accounting irregularities at the supermarket chain. The case comes after the grocer was forced to suspend four senior executives and call in investigators in September 2014, when it discovered its profits had been artificially inflated by £250m. The discovery of the accounting irregularities, which Tesco subsequently revised to £263m, caused the group’s value to slump by about £2bn. Two months later the law firm Stewarts Law, along with litigation funders Bentham Europe, began soliciting angry shareholders to support joint action against Tesco. After spending two years putting that case together, the claim is expected to be filed with the high court later this month. Jeremy Marshall, chief investment officer of Bentham, said: “This is the first wave. There will be a second series of investors that will join a bit later. A lot of people thought this case would never get off the ground.” Marshall added that a sticking point had been that investors will need to prove dishonesty at director level in order to win any claim. He added that those efforts had been assisted by news last month that the Serious Fraud Office (SFO) had charged three former senior Tesco directors with fraud in relation to the accounting scandal at the supermarket chain. “The SFO felt it had credible evidence [to bring charges] allowing investors a sufficient level of comfort,” Marshall added. Carl Rogberg, the former finance director of Tesco UK, Christopher Bush, the former managing director of Tesco UK, and John Scouler, the former commercial director for food, have all been charged with one count of fraud by abuse of position and one count of false accounting. All three men deny the charges. The SFO said its investigation into Tesco remained ongoing and it is still possible that further individuals could face action. Tesco did not comment on the claim.
This month Tesco will face a joint action for £150m from 60 shareholders who hope to recover losses from accounting irregularities. The supermarket called in investigators and suspended four senior employees in September 2014 after it was found the firm’s profits had been artificially increased by £263m. The controversy led to a £2bn loss in the group’s value. In July 2015, Sainsbury’s announced that its chief executive, Dave Lewis, would step down at the end of this year.