Tesco Probe Dropped by Audit Watchdog After Half a Decade
(Bloomberg) -- A probe into Tesco Plc managers was dropped by U.K. watchdogs, ensuring that no individuals will be punished following a series of criminal and regulatory investigations into one of the nation’s biggest accounting scandals.
The Financial Reporting Council said on Monday it closed a probe following Tesco’s September 2014 announcement it had overstated profits by 263 million pounds ($333.5 million), a figure that was increased to 326 million pounds following an independent audit.
The decision closes a string of failed regulatory and criminal investigations into the scandal, which initially wiped 2 billion pounds off the supermarket chain’s market value. While the Serious Fraud Office reached a deal with Tesco that led to a combined 214 million pounds in fines, three executives were cleared following a pair of high-profile trials.
The FRC, the U.K.’s much maligned accounting regulator, has dropped a total of three probes, including one into Tesco’s chief financial officer in 2016 and one into its auditors at PricewaterhouseCoopers in 2017.
The watchdog has now “decided to discontinue the matters in relation to each of the remaining subjects,” it said in a statement. The final probe was delayed until the criminal cases were ended last year.
Tesco said that it has never commented on the position of any individuals in relation to the accounting scandal and that it has “fundamentally transformed” its business since 2014.
But the company won’t be able to completely turn the corner on the episode until later this year. Tesco investors will proceed to trial in October with an $800 million lawsuit that has been delayed multiple times amid the criminal trials and, more recently, the coronavirus pandemic.
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