The UK’s biggest retailer has been fined £129 million by the Serious Fraud Office over its 2014 accounting scandal. On top of the fine, Tesco (LON:TSCO) is expected to compensate shareholders with a further £85 million.
The amounts were agreed following a two-year investigation, starting in 2014.
“In making its finding, the FCA has expressly stated that it is not suggesting that the Tesco Plc board of directors knew, or could reasonably be expected to have known, that the information contained in that trading statement was false or misleading.” said Tesco in a stock market announcement on Tuesday morning.
The compensation will be for those who bought shares and bonds in the supermarket between 29 August and 19 September 2014, which was in a separate agreement with the Financial Conduct Authority.
In 2014, Tesco gave a false account of its performance. This led to a trading statement that gave a better, and false, view of its profits. The profits were originally estimated to be £250 million higher than they should be, but this was later changed to £326 million.
Anyone that purchased shares bonds during this period in 2014 will receive 24.5 pence a share plus interest at 1.25 percent a year for institutional investors, or 4 percent a year for retail investors.
“Over the past two-and-a-half years, we have fully cooperated with this investigation into historic[al] accounting practices, while at the same time fundamentally transforming our business.” said Tesco’s chief executive, Dave Lewis.
“We sincerely regret the issues that occurred in 2014 and we are committed to doing everything we can to continue to restore trust in our business and brand.”
Tesco will report its full-year results for 2016 on April 12 2017. It is now attempting a takeover of the cash and carry wholesaler Booker (LON:BOK).