US shareholders are launching a lawsuit against Tesco in a bid to win billions of dollars of compensation for last year’s accounting scandal.
The group, Tesco Shareholder Claims Limited (TSC), said in a statement on Tuesday that the discovery last year that the retailer had overstated its profits by £263m caused “a permanent destruction of value to shareholders”. “Tesco is one of the widest held stocks in the UK and this loss has hit pension funds and investors across the UK and beyond,” John Bradley, chairman of the TSC, said. “We look forward to bringing this claim to court.”
Having filed an action in the US, litigation firm Scott & Scott is now attempting to gain support from institutional shareholders in the UK and Europe for a similar claim on a no-win, no-fee basis.
The group said it expected the claim, open to any institutional shareholder that bought shares in Tesco before the retailer’s announcement of 22 September, to be in the region of £0.50-£0.70 per share. Tesco has 8.1bn shares listed, suggesting the claim could be for billions of pounds.
Tesco declined to comment but the lawsuit will be seen as a further setback for CEO Dave Lewis as the retailer seeks to put last year’s scandal behind it.
In November last year, commercial litigation law firm Stewarts Law said it will seek to win compensationin the UK for Tesco’s alleged breaches of the Financial Services & Markets Act, on behalf of Tesco shareholders.
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