 has said they are to open a £85 million compensation scheme for those affected by the 2014 accounting scandal. In the trading statement,){kind=link}
Tesco (LON:TSCO) has said they are to open a £85 million compensation scheme for those affected by the 2014 accounting scandal.
In the trading statement, the supermarket overstated their first half profits by £250 million, deliberately withholding money that was owed to suppliers.
Sales in Tesco were falsely boosted and soon after the scandal emerged, the supermarket was sued by investors saying they lost millions after buying shares on the basis of misleading accounts. Shares in the group lost almost half their value.
The new compensation scheme, which will open on Wednesday, will provide redress to the 10,000 share and bondholders that bought shares in the group between 29 August and 19 September 2014.
“Tesco needs to repair the reputational damage from the accounting scandal and will hope that this compensation scheme will help draw a line under the matter. The claims process is a little clunky but important to follow as it’s a simple equation: no claim, no compensation,” said Danny Cox, from Hargreaves Lansdown.
The compensation scheme will entitle investors 24.5p per share purchased, not including interest at 1.25 per cent per year. Retail investors will be given an increased interest rate of four percent per year.
The process will be overseen by the Financial Conduct Authority.
Tesco has already paid a £129 million fine for the scandal, which was agreed in March this year. The Serious Fraud Office also charged three former Tesco employees for the accounting scandal.
Since the scandal, the supermarket has “undertaken an extensive programme of change” including “extensive changes to leadership, structures, financial controls, partnerships with suppliers, and the way the business buys and sells”