'Sinister' View of Tesco Accounting Unfounded, Lawyer Says
(Bloomberg) -- Prosecutors in the U.K. trial of three former Tesco Plc executives accused of accounting fraud have given “sinister” meanings to legitimate accounting practices that aren’t supported by their own witnesses, according to a lawyer for one of the defendants.
In closing arguments Thursday, Nicholas Purnell, who represents Tesco’s former U.K. Finance Director Carl Rogberg, said the practice of “pulling forward” -- booking income in a different period than when it was secured -- was legitimate despite the prosecution insinuating it could only be used to misrepresent income.
“There was, in fact, a basis of pull forward that was common across the business, and remained common across the business, which did not have any sinister connotation,” said Purnell. The prosecution is “relying on a definition which is not supported by those witnesses upon which they seek to rely.”
In September 2014, Tesco said it had overstated profits by about 250 million pounds ($336 million) after a senior Tesco accountant compiled a report drawing attention to potentially questionable book-keeping practices. The revelation wiped about 2 billion pounds from Tesco’s market value.
The U.K. Serious Fraud Office opened an investigation and charged Rogberg, ex-U.K. chief Chris Bush and the former British commercial director John Scouler in 2016.
Purnell told the jury it wasn’t just a question of the defendants saying they weren’t aware of anything untoward, there was a whole "cast list" of witnesses who hadn’t heard the term pull forward used in an illegitimate sense.
The prosecution has shown an "inability to recognize the evidence and to move from the position which they had adopted at the outset," said Purnell.
Closing arguments in the trial, which started in September, are due to finish next week. The judge is scheduled to sum up the case and send the jury away to deliberate in January.
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