Tesco to Pay £129 Million Accounting Fraud Fine
Tesco has agreed to pay a fine of £129 million, plus some compensation, to settle an investigation regarding accounting fraud dating back to 2014. The investigation was one of the biggest crises that the company has faced in the near century that it has been trading.
Tesco has struggled to rebuild itself following the scandal, and has battled with a price war which caused difficulties for the whole sector. It said on Tuesday that it would be taking a one-off charge of £235 million pounds as a part of its 2016-2017 results, which will be published on April 12th.
The supermarket has reached a deferred prosecution agreement with the Serious Fraud Office, which means that as long as it meets certain conditions, and pays the penalty, it will avoid prosecution. It will be paying compensation to some of its investors, to a sum of around £85 million pounds.
Tesco said that it sincerely regrets the issues, and that it is committed to doing everything that it can to restore trust in the company and its brand.
The announcement did little to affect the mood of investors, and shares in the group remained flat during the morning’s trading.
The fraud allegations relate to a trading statement released by the group in August 2014, which overstated the company’s expected profits, by booking commercial deals with suppliers earlier than they should have been. The FCA is not levying a penalty against the group over this case.
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