3rd Feb 2015 13:24
LONDON (Alliance News) - Tesco PLC on Tuesday said it has cleared the payments due to its former chief executive and chief financial officer, saying it concluded it does not have the basis to continue withholding the payments.
Tesco has suspended the GBP1.2 million payment due to Philip Clarke and the GBP970,880 owed to Laurie McIlwee owing to the ongoing investigation into the accounting practices employed for commercial income when the pair were at the company. Problems in accounting for its UK commercial income resulted in Tesco having to issue a warning to investors over its guidance for its first-half profit.
Tesco said it is "contractually committed to make the relevant payment to each former director unless it can legally establish a case of gross misconduct against him". It said that, after taking legal advice, it concluded it does not have any basis to continue withholding the payments at the present time. It said its board considers that defending the claims for the payments would not be in its best interests.
The supermarket said the Serious Fraud Office is continuing its investigation into its profit overstatement and said that should new information come to light from that investigation which changes the current position, it would seek to recoup the payments from Clarke and McIlwee and has fully reserved all of its legal rights in this respect.
Shares in Tesco were up 1.6% to 232.00 pence on Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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