UK’s largest supermarket, Tesco, is facing a record £129m fine from the Serious Fraud Office (SFO) for overstating profits in 2014. The SFO’s investigation was triggered by Tesco’s admission that it had exaggerated profits by £263m, later revised to £326m. The supermarket giant will also have to pay £85m for compensation claims from investors, who were misled by the inflated figures.
Tesco has agreed to a Deferred Prosecution Agreement (DPA) with the SFO, which means it will not face criminal prosecution if it meets certain conditions, including the payment of the fine. This DPA is the first of its kind involving a listed company in the UK.
The Financial Conduct Authority (FCA) has also ordered Tesco to compensate investors who purchased shares or bonds between August and September 2014, marking the first time the FCA has used its powers to mandate a listed company to compensate for market abuse.
Despite the financial blow, Tesco’s share price has remained stable, indicating that the market had anticipated the penalties. The supermarket is striving to regain trust, promising greater transparency in its financial reporting.
Go to source article: http://www.bbc.co.uk/news/business-39704997