Tesco share price: Grocer to cover £1m investigation costs
Tesco (LON:TSCO) has been forced to pay £1 million towards the costs of the Grocery Code Adjudicator’s (GCA) investigation, the Guardian has revealed.
The industry watchdog launched a probe into the group’s practices in February last year after Tesco admitted it had overstated profits in a scandal that had also triggered a Serious Fraud Office (SFO) investigation. The GCA, Christine Tacon, said last month that the UK’s largest retailer had seriously breached the legally binding code governing the grocery market by deliberately delaying payments to suppliers in order to boost profits. Tesco was instructed to make significant changes to the way it deals with suppliers, with some having had to wait for up to two years for millions of pounds owed by the supermarket.
Tacon was unable to fine Tesco as its breaches of the code took place before her power to levy fines worth up to one percent of turnover came into force in April last year. However, the adjudicator forced Tesco to make a £1 million payment, which will cover the majority of her £1.2 million costs relating to the year-long investigation. The payment is not a punitive measure. “I asked Tesco to contribute this money, which is a sizeable sum for any business,” the GCA said as quoted by the Guardian yesterday.
Tesco’s share price kicked off today’s session significantly higher. As of 08:35 GMT, the stock was changing hands at 170.15p, 1.10 percent up intraday. The increase came amid a generally upbeat UK stock market trend, with the FTSE 100 standing 1.58 percent up at 5,929.41 points as of the same time.
As of 08:50 GMT, Thursday, 04 February, Tesco PLC share price is 169.63p.