FRC ends probe into £250m Tesco accounts scandal

Britain's auditing regulator said it had closed a five-year probe into Tesco staff involved in an accounting scandal that overstated profits by £250m.

The Financial Reporting Council's six-year investigation looked at the supermarket chain's accounts between February 2012 and 2014.

A whistleblower alerted chief executive Dave Lewis about a potential overstatement in the company’s accounts, not long after he had taken over at the helm of the retail giant.

An internal investigation discovered Tesco had been banking profits from suppliers before money was deposited and revealed that under former chief executive boss Philip Clarke the company had been pushing suppliers for heavy discounts, and for incentives to put their products in prominent places in stores.

Tesco paid a a £129m fine and £85m in compensation to investors under a deal with the Serious Fraud Office (SFO) in 2017 in return for non-prosecution. A case against individual employees collapsed in 2018 due to lack of evidence.

The FRC on Monday said the probe into accountants within Tesco were paused pending the SFO trial of three senior employees on charges relating to the overstatement.

“Following the conclusion of the SFO proceedings, and consideration of relevant material and information subsequently obtained from the SFO, Executive Counsel has decided to discontinue the matters in relation to each of the remaining subjects.

“Accordingly, the matter has been closed without service of a formal complaint.”