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Tesco profits over-estimate totalled GBP263m, chairman steps down

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Tesco has revealed today that its total over-statement of profits was GBP263m (US$421m), more than its initial estimate, and that its chairman is to step down.

Tesco remains under investigation from the Financial Conduct Authority

Tesco remains under investigation from the Financial Conduct Authority

In a results announcement for the half-year to the end of August, the UK-based retailer said a Deloitte review of its accounting practices found there had been “similar practices” prior to the current financial year. Deloitte pinpointed GBP118m of overstatement in this year's first-half, plus GBP70m relating to the 2013/14 financial year and around GBP75m related to "pre" the 2013/14 period.

Last week it emerged that Tesco had suspended three more executives as part of its investigations – with one of them believed to be the group's director of wine, spirits and beer, Dan Jago. It brought the total to eight the number of employees suspended over the investigation. just-drinks understands all eight employees remain suspended. 

Deloitte also found that the accounting “practices” between reporting periods are linked, as "income pulled forward grew period by period”. Tesco said Deloitte had concluded its probe and the report has been passed to the Financial Conduct Authority (FCA) and “other regulatory agencies”.

Tesco's chairman Sir Richard Broadbent, who announced he is stepping down from the group today, said: “The issues that have come to light over recent weeks are a matter of profound regret.

“A new management team is in place to address the root causes of the mis-statement and to develop and implement the actions that will build the company’s future...we will fully cooperate with the regulatory authorities.” 

Tesco reported a 92% fall in first-half profits to GBP112m as sales slipped 4.4%. 


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