Managing Director Suspended after Tesco H1 Profits Overstated by £250 Million
UK retail giant Tesco is investigating four senior management staff after it was discovered that H1 profits were overstated by £250 million.
Among those suspended while the inquiry is carried out is Managing Director Chris Bush, who will be temporarily replaced by Robin Terrell, the head of Tesco’s online operations.
Deloitte has been appointed to independently look into the issue as shares dramatically fell by around 10 percent as the news broke.
In statement Tesco said: "On the basis of preliminary investigations in to the UK food business, the board believes that the guidance issued on 29 August 2014 for the group profits for the six months to 23 August 2014 was overstated by an estimated £250 million.
"Some of this impact includes in-year timing differences. Work is ongoing to establish the extent of these issues and what impact they will have on the full year.
"The board has asked Deloitte to undertake an independent and comprehensive review of these issues, working closely with Freshfields, the group's external legal advisers.
"We will provide a further update at our interim results, which will now be announced on the 23 October 2014."
The warning signs were already apparent as in August the firm cut its full-year profit forecast to £2.4bn from £2.8bn. A number of established UK supermarkets are feeling the heat with the likes of discount shops Lidl and Aldi luring a number a customers away.
Like what you see! Signup for our weekly newsletter