LONDON (Reuters) – Two former directors of Tesco (TSCO.L) were acquitted on Thursday of fraud and false accounting at Britain’s biggest retailer following a 2014 scandal.
Former Tesco executive Christopher Bush arrives at Southwark Crown Court in London, Britain, December 6, 2018. REUTERS/Henry Nicholls
Christopher Bush, 52, who was managing director of Tesco UK, and John Scouler, 50, who was UK food commercial director, had been accused of cooking the books to support Tesco’s share price and secure huge compensation packages.
However, Judge John Royce told a jury at London’s Southwark Crown Court that the men had been acquitted by the Court of Appeal on Wednesday after it upheld his ruling that the prosecution case was too weak for the case to continue.
“I concluded in certain crucial areas the prosecution case was so weak it should not be left for a jury’s consideration,” Royce said.
Bush and Scouler were charged in September 2016 with one count of fraud by abuse of position and one count of false accounting. A first trial was abandoned in February, shortly before the jury was due to retire to consider its verdict.
The re-trial had been running since October. The case stems from an overstatement of Tesco’s profit forecast in 2014.
On Sept. 22, 2014, the group issued a statement to the London Stock Exchange saying that during its final preparations for an interim results announcement, it had identified a 250 million pound overstatement of its expected profit for the half-year, mainly due to booking commercial deals with suppliers too early.
In the following weeks, Tesco suspended eight senior members of staff including Bush and Scouler. Its shares tumbled and the retailer was plunged into the worst crisis in its near 100-year history.
The profit forecast overstatement, identified three weeks after Dave Lewis took over as chief executive from Philip Clarke, was later raised to 263 million pounds.
The forecast related to guidance published by Tesco in a trading update on Aug. 29, 2014, downgrading its outlook.
The verdict is a huge blow for Britain’s Serious Fraud Office (SFO) which launched its Tesco investigation back in October 2014. Tesco has said it is a different company now, having transformed its business since 2014 under Lewis.
Reporting by James Davey, editing by Michael Holden and Stephen Addison