Tesco share price: SFO nears end to grocer’s probe

on Nov 14, 2016
Updated: Oct 21, 2019

The Serious Fraud Office (SFO) will decide by the end of the month whether to pursue a plea arrangement with Tesco (LON:TSCO) and bring further charges against former bosses over the 2014 accounting scandal at Britain’s biggest supermarket, Sky News has revealed. The report comes after the SFO recently charged three former directors over the £263-million profit overstatement.

Tesco’s share price has jumped in London this morning, having rallied 3.02 percent to 204.45p as of 09:20 GMT. The shares are outperforming the broader market rally, with the benchmark FTSE 100 index currently 1.14 percent better off at 6,806.83 points. The group’s shares have gained more than 22 percent over the past year, and are up by some 36 percent in the year-to-date.
Sky News reported yesterday that the SFO had informed interested parties in recent days that it expects to reach charging decisions in relation to Tesco’s accounting scandal by the end of November. Sources told the newswire that those decisions were likely to relate to both individuals and the company, with the prospect of a deferred prosecution agreement (DPA) now “firmly back on the agenda”.

The newswire notes that if a DPA was agreed with Tesco, it is unclear what specific charges the supermarket group would be required to plead guilty to, although such a deal could expose the company to a significant financial penalty as well as future scrutiny of its compliance practices. Sources meanwhile cautioned that it was by no means certain that prosecutors would finalise a DPA with the blue-chip grocer.
The news comes after the SFO recently charged three individuals, about two years after Dave Lewis, Tesco’s new chief executive at the time, flagged up the discovery of a black hole in the company’s accounts which was eventually valued at £263 million.
As of 09:26 GMT, Monday, 14 November, Tesco PLC share price is 204.35p.

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