Serious Fraud Office
Deferred Prosecution Agreement between the SFO and Tesco published
The SFO can now share in full the terms of a Deferred Prosecution Agreement (DPA) reached with Tesco Stores Ltd after reporting restrictions were lifted yesterday.
Between February and September 2014, instead of working to safeguard the financial interests of the company and its shareholders, a culture existed at Tesco that encouraged illegal practices to meet accounting targets, including improperly recognised income in the UK accounts, by ‘pulling forward’ income from subsequent reporting periods.
Lisa Osofsky, Director of the Serious Fraud Office yesterday said:
“Tesco Stores Limited dishonestly created a false account of its financial position by overstating its profits.
“The DPA clearly outlines the extent of this criminal conduct for which the company has accepted full responsibility.”
Under the DPA, Tesco agreed to pay a £129m fine and £3m investigation costs.
The company will also undertake and implement an ongoing compliance programme during the three year term of the DPA.
After discovering issues in their financial statements, Tesco referred itself to enforcement authorities after revealing that revenues had been incorrectly recorded as profit and made an announcement to the market.
Notes to editors
- The SFO began investigating this case in October 2014. See press releases here.
- Tesco Stores Limited’s Deferred Prosecution Agreement with the SFO was approved by the President of the Queen’s Bench Division, the Right Honourable Sir Brian Leveson at Southwark Crown Court on 10 April 2017. See press release here.
- The DPA with Tesco Stores Limited was the fourth ever agreed in the UK.
- Tesco Plc has agreed to a separate £85m statutory compensation scheme for shareholders and bondholders with the Financial Conduct Authority (FCA) under the Market Abuse Regulations.
- The SFO charged three former senior managers over alleged financial misreporting. Sir John Royce ruled that Christopher Bush and John Scouler had no case to answer on Monday 26 November 2018. Full details here.
- A third defendant, Carl Rogberg, was severed from the trial. The SFO offered no evidence at a hearing on 23 January 2019 and Mr Rogberg was acquitted of all charges.
- Counsel for the Prosecution
- Sasha Wass QC
- Esther Schutzer-Weissman
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