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Tesco in crisis: Supermarket rushes in new finance chief Alan Stewart amid profit probe Tesco in crisis: Supermarket rushes in new finance chief Alan Stewart amid profit probe
(about 4 hours later)
Tesco has rushed in new finance chief Alan Stewart just hours after the supermarket giant was plunged into the gravest crisis in its history when it announced half-year profits were inflated by £250 million in a shock accounting error.Tesco has rushed in new finance chief Alan Stewart just hours after the supermarket giant was plunged into the gravest crisis in its history when it announced half-year profits were inflated by £250 million in a shock accounting error.
Alan Stewart will assume his new role as chief financial officer starting today, rather than the previously announced date of 1 December. Tesco chief executive Dave Lewis pleaded with Marks & Spencer boss Marc Bolland to let his departing finance head leave before the end of his notice period.
Stewart announced he would leave Marks & Spencer, where he served as CFO, in July but was currently on what is known as "gardening leave" with M&S signalling plans to hold him to his contractual notice period. It is understood M&S approved his early exit after Tesco's chief executive Dave Lewis made a personal appeal to M&S boss Marc Bolland. However, the intervention by Lewis raises further questions over chairman Sir Richard Broadbent’s future, as The Independent understands that yesterday was the first time Tesco had approached M&S to ask for Stewart to start early.
Yesterday, Tesco promised the "full and deepest" investigation into its accounts after admitting the disappearance of almost a quarter of its expected £1.1 billion profits for the first half of 2014. This was despite Tesco issuing three profit warnings and comes as Sky News said former finance director Laurie McIlwee was told by former chief executive Phil Clarke he would not be required to attend any of Tesco’s corporate premises.
Four senior executives have been asked to step aside while the investigation unfolds. The shock admission wiped more than £2 billion off Tesco's market value as the stock plummeted to an 11-year low. Broadbent had previously said he was “not prepared to guess” when McIlwee had last been in the office, although a statement in April following the director’s removal said he would “remain in his role to ensure a smooth handover to his successor”.
Stewart’s arrival means Tesco has a proven retailer on its board for the first time since Phil Clarke was unceremoniously dumped in July.
Stewart will receive a £1.7 million golden hello in compensation for lost share options, and will see his basic pay jump 30 per cent to £750,000 compared with his M&S salary.
However, that is 15 per cent down on predecessor McIlwee.
Market share data from Kantar Worldpanel revealed today that Tesco suffered the biggest falls in sales, down 4.5 per cent, of all the main supermarkets on the High Street.
Meanwhile Tesco’s biggest overseas company, Homeplus, is under investigation by authorities in South Korea over suggestions it sold customer details and awarded a competition prize of a BMW to someone known to employees.
A spokesman for Tesco said: “We take the protection of our customers’ data extremely seriously and are co-operating with the investigation.”
In relation to McIlwee’s handover, he added: “We set out in April that until he left the company in October Laurie McIlwee would carry out transition activities and support handover with colleagues.” He could not elaborate on what these activities were.