Tesco suspends executives after overstating profits
Tesco has suspended four executives including its managing director after revealing that it had overstated its profits for the six months to 23 August 2014.
Tesco’s share price plunged by eight per cent shortly after the retailer announced that its half-year profits for the group had been overstated by £250million. The mistake came to light after investigations into its UK food business, during preparations for its upcoming interim results on 1 October 2014.
Due to the gravity of the issue Tesco has asked its legal advisors to conduct an investigation into the results and has suspended four exceutives. According to media reports, these include UK managing director Chris Bush.
Dave Lewis, group CEO, commented: “We have uncovered a serious issue and have responded accordingly. The chairman and I have acted quickly to establish a comprehensive independent investigation. The board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear.”
In a statement, the supermarket said it is working on establishing the issues and what impact it will have on the remainder of the year. Tesco will provide further information in its interim results now expected on 23 October 2014.
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