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Tesco: Under investigation

Tesco will be investigated by the Financial Conduct Authority (FCA) after the retailer revealed last week it has overstated expected half-year profits by £250 million, it has been confirmed today.

The investigation will be in addition to an independent review by auditors Deloitte, in partnership with Tesco’s external legal advisors Freshfields.

“Tesco will continue to co-operate fully with the FCA and other relevant authorities considering this matter,” a company statement said.

The news comes as the Groceries Code Adjudicator, Christine Tacon, announced yesterday that she has met with Tesco to discuss the issue, and has requested that the Groceries Code of Practice be taken into consideration during the investigation.

Following the admission last week, Tesco suspended four of its senior executives: UK managing director Chris Bush, head of Group Food Sourcing Matt Simister, UK finance director Carl Rogberg and commercial director for food John Scouler.

Speaking to FPJ, retail analyst Steve Dresser said that the longer the four directors are suspended, the less likely it is that they will be returning.

“It was a necessary thing to do. They have to deal with it. And it may be a chance for Lewis to reset brand values,” he said.