Tesco Suspends Fifth Senior Executive over £250 Million Profit Blunder
UK retail giant Tesco has asked its fifth senior executive to stand aside as the investigation into the astonishing £250 million profit overstatement continues.
Commercial Director Kevin Grace is the latest leading figure to be told to stand down since the probe began two weeks ago, following the fate of four others including UK Managing Director Chris Bush.
Other executives suspended include Carl Rogberg, UK Finance Director; John Scouler, Food Commercial Director and Matt Simister, who is in charge of sourcing.
According to the Financial Times, the profit overstatement is related to the incomes received from suppliers and how this is recognised by Tesco.
It has been a tumultuous year for Britain’s biggest retailor, with the ramifications of this latest disaster not yet clear as consumers weigh up whether to take their custom elsewhere.
Share prices have tumbled a massive 50 percent in the space of a year, though it still holds more than 28 percent of the UK grocery market.
In a bid to reassure investors the company is appointing two non-executive directors to its board. Richard Cousins of catering group Compass and Mikael Ohlsson, former head of Ikea, are set to join soon.
The fiasco also coincides with the rise of discount supermarkets Aldi and Lidl, which has prompted panic among the country’s more established operators.
This includes Morrisons, who recently launched its Match & More loyalty in a bid to compete with its cheaper rivals.
Tesco’s investigation into the profit disaster is being carried out by accountancy firm Deloitte and law firm Freshfields. The Financial Conduct Authority will also be conducting its own studies.
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