1st Oct 2014 06:44
LONDON (Alliance News) - Tesco PLC Wednesday said it had been notified by the Financial Conduct Authority that the regulator has started a full investigation after Tesco admitted it had overstated its profit guidance for the first half of its financial year.
In a statement, Tesco said it would continue to cooperate fully with the FCA and other relevant authorities considering the matter. Tesco has already secured Deloitte to conduct an independent review into the issue.
Last week, the UK accountancy regulator the Financial Reporting Council, said it was monitoring the situation closely, but would not act until Tesco's own investigation was completed.
Tesco could be facing fines if it is found to have broken accounting rules.
On September 22, Tesco saw about GBP2 billion wiped off its market capitalisation after it said it had overstated its first-half pretax profit guidance by GBP250 million. It has suspended four executives while it undertakes a thorough investigation into the issue.
The Sunday Times reported at the weekend that the insider who blew the whistle on the accounting problems at Tesco attempted to raise the alarm in the past but was ignored.
The whistleblower, an unnamed accountant with the supermarket chain, raised concerns with his superiors but "failed to get traction", according to a senior source at the company cited by the newspaper.
By Steve McGrath; [email protected]; @stevemcgrath1
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