29th Oct 2014 14:26
LONDON (Alliance News) - Tesco PLC Wednesday confirmed that the Serious Fraud Office has launched an investigation into accounting practices at the company.
The confirmation comes after Sky News reported earlier Wednesday that the SFO was poised to launch a formal criminal probe into Tesco's recent GBP263 million profit overstatement.
In a short statement, Tesco said that in light of the SFO investigation, it has been notified by the Financial Conduct Authority that its investigation will be discontinued.
"Tesco has been cooperating fully with the SFO and will continue to do so," Tesco said.
Britain's largest supermarket chain last week said Deloitte had completed its investigation into the overstatement of the half-year profit expectation and confirmed an impact of GBP263 million, slightly more than the GBP250 million impact the retailer had announced last month. It said GBP118 million related to this year's first-half trading profit, about GBP70 million to the last financial year and about GBP75 million to years before that, although it did not say just how far back the issues went.
The struggling retailer was being investigated by the UK Financial Conduct Authority to determine why the overstatement occurred in the beginning. However that will now be replaced with an investigation by the SFO.
According to the SFO website, the current average length of an SFO case is four to six years.
Tesco shares were trading 2.9% higher at 174.70 pence Wednesday afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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