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Former Tesco bigwigs cleared of fraud and false accounting

Thu, 6th Dec 2018 11:43

(Sharecast News) - Two former Tesco directors have been acquitted of charges of fraud and false accounting after their case was dismissed after eight weeks due to a lack of evidence.

Former UK managing director Chris Bush and former UK food commercial director John Scouler were accused of manipulating accounting figures to overstate profits, leading the company to announce interim profits of 1.1bn in 2014, an overstatement of 250m.

The figures had been inflated due to early recognition of payments from food suppliers and delays in charging costs, and when Tesco revealed the error 1.5bn was wiped off the market value of the company's shares in a single day.

The case brought by the serious fraud office (SFO) alleged that both defendants were aware that income had been wrongly included but had not acted in order to make the supermarket chain, in which they each had benefits packages of over 1m, appear healthier.

Both Bush and Scouler denied counts of fraud and false accounting, which trial Judge Sir John Royce dismissed as "so weak it should not be left for a jury's consideration" at Southwark Crown Court.

The SFO attempted to have the decision overturned at the Court of Appeal on Wednesday but were unsuccessful.

Richard Sallybanks, partner at BCL Solicitors, representing John Scouler, said: "We are delighted that Mr Scouler leaves court today knowing that the judge, having heard the entirety of the prosecution evidence, reached the firm conclusion that he had no case to answer."

The failure of the case will heap further scrutiny on the SFO, which is thought to have spent more than 10m on investigation and legal fees for the case and has suffered several high-profile embarrassments in recent years.

In 2014, the SFO's handling of the prosecution of property developer Vincent Tchenguiz led to the case against him being thrown out and subsequently receiving millions in damages and a public apology.

Tesco's shares were down 2.72% at 195.06p at 1144 GMT.

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