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You can find the current article at its original source at https://www.theguardian.com/business/2018/oct/08/former-tesco-managers-go-on-trial-accused-of-overstating-profits
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| Former Tesco managers go on trial accused of overstating profits | Former Tesco managers go on trial accused of overstating profits |
| (25 days later) | |
| Two former Tesco senior managers have gone on trial accused over an alleged fraud that resulted in the company’s profits being overstated by a quarter of a billion pounds. | Two former Tesco senior managers have gone on trial accused over an alleged fraud that resulted in the company’s profits being overstated by a quarter of a billion pounds. |
| Chris Bush, the former UK managing director, and John Scouler, the former UK food commercial director, were aware that income was being wrongly included in the supermarket chain’s financial records to meet targets and make Tesco look financially healthier than it was, a court heard. | Chris Bush, the former UK managing director, and John Scouler, the former UK food commercial director, were aware that income was being wrongly included in the supermarket chain’s financial records to meet targets and make Tesco look financially healthier than it was, a court heard. |
| Bush and Scouler were described as “generals”, with those working below them referred to by the prosecutor Sasha Wass QC as “foot soldiers”, who she said were “pressurised and coerced” into carrying out such a practice. | Bush and Scouler were described as “generals”, with those working below them referred to by the prosecutor Sasha Wass QC as “foot soldiers”, who she said were “pressurised and coerced” into carrying out such a practice. |
| The jury at Southwark crown court was told the case is a retrial and that a third man, Carl Rogberg, is charged with identical offences but is currently not well enough to stand trial. | The jury at Southwark crown court was told the case is a retrial and that a third man, Carl Rogberg, is charged with identical offences but is currently not well enough to stand trial. |
| Wass said: “The prosecution case in a nutshell is that the defendants, together with Mr Rogberg, were aware that income was being wrongly included in the financial records of the company which were used to inform statements to the stock market. | Wass said: “The prosecution case in a nutshell is that the defendants, together with Mr Rogberg, were aware that income was being wrongly included in the financial records of the company which were used to inform statements to the stock market. |
| “They were aware that this was being done in order to meet targets so that the company would look financially healthier than it was. They were aware that this wrongly included income would result in Tesco’s trading profit and share price being overstated.” | “They were aware that this was being done in order to meet targets so that the company would look financially healthier than it was. They were aware that this wrongly included income would result in Tesco’s trading profit and share price being overstated.” |
| Tesco made a public announcement to the stock market in September 2014 saying profits had been overstated in a statement the previous month by approximately £250m, the jury was told. | Tesco made a public announcement to the stock market in September 2014 saying profits had been overstated in a statement the previous month by approximately £250m, the jury was told. |
| Wass said that revelation had caused “shockwaves to run through the stock market”, resulting in the company’s shares plummeting by nearly 12% and wiping £2bn off the share value. | Wass said that revelation had caused “shockwaves to run through the stock market”, resulting in the company’s shares plummeting by nearly 12% and wiping £2bn off the share value. |
| She said it happened at a time when Tesco was facing challenges from budget rivals such as Aldi and Lidl. | She said it happened at a time when Tesco was facing challenges from budget rivals such as Aldi and Lidl. |
| Wass continued: “Tesco was experiencing a drastic reduction in both profits and market share.” | Wass continued: “Tesco was experiencing a drastic reduction in both profits and market share.” |
| The jury heard that investigations had found that by September 2014 “400-600 of the buyers, almost everyone across Tesco, had been involved in falsifying their records by improperly recognising income”. | The jury heard that investigations had found that by September 2014 “400-600 of the buyers, almost everyone across Tesco, had been involved in falsifying their records by improperly recognising income”. |
| Scouler, 50, of St Albans, and Bush, 52, of High Wycombe, each deny one count of fraud and another of false accounting. | Scouler, 50, of St Albans, and Bush, 52, of High Wycombe, each deny one count of fraud and another of false accounting. |
| They and Rogberg at the time had benefits packages with Tesco of more than £1m each. | They and Rogberg at the time had benefits packages with Tesco of more than £1m each. |
| The trial, before Sir John Royce, continues. | The trial, before Sir John Royce, continues. |
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