The U.K. Serious Fraud Office is planning to announce a decision on whether to file criminal charges against individuals involved in the Tesco Plc accounting scandal as soon as this month, according to two people with knowledge of the situation.
The SFO is looking to disclose any charges in the first half of September, the people said, who declined to be identified because the plans aren’t public. The move would mark the start of a much-anticipated conclusion to a two-year investigation that has plagued the retailer.
The U.K. prosecutor was one of a number of agencies to open an investigation into Tesco’s accounting practices in 2014 after the company said it had overstated profits by £263 million ($352 million). At least nine senior managers were suspended, most of whom have since left. A number of executives have been interviewed under caution by the SFO in the course of the probe, including former chief executive officer Philip Clarke. Interviews under caution are generally conducted with possible suspects and mean that anything that a person says can be used in court.
Tesco has long been suspected as a candidate for a deferred prosecution agreement (DPA). Under such a deal, prosecution would be suspended if the company agreed to conditions that can include paying a fine, repaying profits, and helping bring cases against individuals. A key requirement of a DPA is cooperation from the company, which Tesco appears to have given. If the retailer is offered a DPA, it would require approval from a UK judge.
A spokeswoman for the SFO and a spokesman for Tesco declined to comment. The SFO’s plans to announce charging decisions were first reported by Sky News.
The UK accounting regulator, the Financial Reporting Council, closed an investigation into Tesco’s former chief financial officer, Laurie McIlwee, last week, saying that there wasn’t a "realistic prospect" that misconduct would be found in the case.
News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.
