Tesco has been fined £129 million and must pay £85m in compensation to avoid prosecution following the discovery of false accounting at the retailer in 2014.
In total, Tesco said it expects total charges to reach £235m, including the penalty, compensation scheme and related costs.
The Deferred Prosecution Agreement (DPA), between Tesco and the Serious Fraud Office (SFO), was announced at a preliminary court ruling yesterday (28 March).
The deal recognises Tesco’s full cooperation with the investigation and “extensive programme of change” within the business, including changes to leadership, supplier partnerships, financial controls and procurement methods, the SFO said.
The SFO said it has begun criminal proceedings relating to other persons involved in the issue, but noted legal restrictions surrounding further comments.
CEO Dave Lewis said: “We sincerely regret the issues which occurred in 2014 and we are committed to doing everything we can to continue to restore trust in our business and brand.”
Tesco has also announced it recognises a finding of market abuse, made by the Financial Conduct Authority (FCA), relating to the trading announcement on 29 August 2014, which overstated expected profits and led to the discovery of historic accounting practices.
The FCA stressed that it is not suggesting that the Tesco board knew, or could reasonably be expected to have known, that the information contained in that trading statement was false or misleading.
The agreement with the FCA led to the establishment of the £85m compensation scheme, which will compensate certain net purchasers of Tesco ordinary shares and listed bonds purchased between 29 August 2014 and 19 September 2014.
There is no penalty being levied by the FCA on Tesco.
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