3rd Oct 2016 14:01
LONDON (Alliance News) - Tesco PLC is facing legal action from 60 investors who claim to have suffered losses of GBP150 million relating to the supermarket giant's accounting scandal in 2014.
Bentham Europe Ltd is the firm funding the legal action on behalf of the shareholders, after Tesco in 2014 admitted overstating profits by GBP263 million, a figure which later increased to GBP326 million.
This immediately wiped over GBP2 billion off Tesco's share price, leaving it embroiled in a massive controversy worsened by a series of profit downgrades the following year, and shares in the company have fallen by 44% since the start of 2014.
Former Finance Director Laurie McIlwee, Chief Executive Philip Clarke and Chairman Richard Broadbent were forced to resign, while a number of executives were suspended in 2014 amidst the scandal.
Last month, an investigation into the retailer by the Serious Fraud Office led to three former Tesco executives being charged with accounting fraud under the UK Fraud Act 2006 and Theft Act 1968.
According to Bentham, Tesco's shareholders have said the statements made by Tesco to the market in relation to the scandal were misleading, and that furthermore they were known to be misleading.
"The level of knowledge within Tesco will be the key battleground in this litigation," Bentham Chief Investment Officer Jeremy Marshall said.
A group of asset managers, hedge funds and pension funds, including UK and international investors, will file the lawsuit in the UK within the next four weeks, according to Bentham.
Last month, specialist litigation funder Fideres Capital also said it planned to assemble a group of institutional investors to bring court proceedings against Tesco.
Tesco already agreed to pay USD12 million in settlement of legal action with shareholders in the US last November.
Shares in Tesco were trading up 1.2% at 185.15 pence on Monday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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