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Tesco accounting error 'stratospheric' Tesco accounting error 'stratospheric'
(35 minutes later)
Tesco's error over its profits guidance was "stratospheric", the chairman of the Parliamentary Business Committee has told the BBC.Tesco's error over its profits guidance was "stratospheric", the chairman of the Parliamentary Business Committee has told the BBC.
Adrian Bailey said it was "unbelievable" that a renowned retailer could get into "such a mess".Adrian Bailey said it was "unbelievable" that a renowned retailer could get into "such a mess".
He also said that Tesco executives could be called before the committee to be questioned by MPs.
On Monday, Tesco admitted that it had overstated its guidance for half-year profits by £250m.On Monday, Tesco admitted that it had overstated its guidance for half-year profits by £250m.
On Wednesday, the UK's accountancy watchdog said it was "monitoring the situation closely". On Wednesday, the UK's accountancy watchdog, the Financial Reporting Council (FRC), said it was "monitoring the situation closely".
However, the Financial Reporting Council (FRC) said it would not act until Tesco's own investigation was completed. However, the FRC said it would not act until Tesco's own investigation was completed.
'Disbelief''Disbelief'
On Tuesday, Tesco said that its new chief financial officer, Alan Stewart, would be joining the company immediately, more than two months earlier than originally planned. He replaced Laurie McIlwee, who resigned from Tesco in April. On Tuesday, Tesco said that its new chief financial officer, Alan Stewart, would be joining the company immediately, more than two months earlier than originally planned.
Tesco has also said that Deloitte will carry out an investigation into the overstatement, together with Freshfields, the group's external legal advisers. He replaced Laurie McIlwee, who resigned from Tesco in April but was not due to officially leave the company until October.
On Wednesday evening, Tesco admitted that Mr McIlwee had not had any input into the retailer's financial matters since he resigned.
"Tesco stated on the 4th of April that until he officially left the company in October, Laurie McIlwee would be available to carry out transitional activities and support handover with colleagues as required," the company said.
"During the transition period, Laurie has in fact not been called upon by Tesco and has not been involved or had any input to any financial matters or held any position of responsibility in the company."
Tesco has appointed Deloitte to carry out an investigation into the overstatement, together with Freshfields, the group's external legal advisers.
Mr Bailey told BBC 5 live's Wake Up To Money programme that his reaction when he heard the news of the accounting error was of "disbelief".Mr Bailey told BBC 5 live's Wake Up To Money programme that his reaction when he heard the news of the accounting error was of "disbelief".
He added he was not happy with Tesco's response. "They should never have got themselves into this mess and it may be too little too late."He added he was not happy with Tesco's response. "They should never have got themselves into this mess and it may be too little too late."
Mr Bailey also said it seemed "incredible they could not have had a full-time finance officer overseeing everything".Mr Bailey also said it seemed "incredible they could not have had a full-time finance officer overseeing everything".
Asked whether he might summon Tesco former chief executive, Philip Clarke, to appear before the business committee, Mr Bailey said: "It may well come to that."Asked whether he might summon Tesco former chief executive, Philip Clarke, to appear before the business committee, Mr Bailey said: "It may well come to that."
"We need to have the outcome from [Tesco's own] inquiry and following that there may well be further inquiries."We need to have the outcome from [Tesco's own] inquiry and following that there may well be further inquiries.
"Depending on the train of events… we may well as a committee want to look at this. Not just at Tesco but at what is going on in the retail industry and in the relationship with the suppliers to see if problems haven't been addressed - because they should have been.""Depending on the train of events… we may well as a committee want to look at this. Not just at Tesco but at what is going on in the retail industry and in the relationship with the suppliers to see if problems haven't been addressed - because they should have been."