Tesco hit with £100m damages claim

Supermarket chain Tesco is facing a damages claim for more than £100m from investors who say they lost money because of accounting irregularities by the company.

The claim involves about 125 institutional funds, says Bentham Europe, the firm funding it.

It stems from a statement by Tesco in September 2014 that its profits had been overstated by £263m.

That was later revised upwards to £326m when Tesco included previous accounts.

Auditors found that the inflated profit figure was the result of Tesco booking payments from suppliers before the money was due.

Bentham Europe said the legal action would seek to prove that Tesco had misled investors and breached the Financial Services and Markets Act.

“The mis-statement of profits leading to a dramatic collapse in the Tesco share price caused substantial damage to many shareholders who manage money for thousands of investors,” said Jeremy Marshall, chief investment officer of Bentham Europe.

“Investors have a right to rely on statements made by companies to ensure that they correctly allocate capital.”

The affair damaged the company’s share price, which has fallen about 20% since 2014.

Tesco declined to comment on the case.

The Serious Fraud Office (SFO) has charged three former Tesco executives with fraud and false accounting as a result of the irregularities.

The three, who have denied the charges, are due to stand trial next year.

[Source:- BBC]