Wednesday 19 December 2018

Fraud case against former Tesco executives dismissed by court

Former Tesco UK managing director Chris Bush leaves Southwark Crown Court after being acquitted of charges of fraud and false accounting (Dominic Lipinski/PA)
Former Tesco UK managing director Chris Bush leaves Southwark Crown Court after being acquitted of charges of fraud and false accounting (Dominic Lipinski/PA)
John Scouler (pictured) and Chris Bush were each cleared of one count of fraud and another of false accounting (Dominic Lipinski/PA)

Franz Wild and Jonathan Browning

Two former Tesco officials have won the dismissal of criminal fraud charges relating to a 2014 accounting scandal that prompted a boardroom reshuffle and an overhaul of supplier relations.

A judge dismissed the charges against Chris Bush, Tesco's former UK CEO, and John Scouler, ex-commercial director of the unit, halfway through a retrial in London.

The charges were tossed out last week, but couldn't be reported while prosecutors from the Serious Fraud Office unsuccessfully tried to get an appeals court to overturn the decision.

The case was triggered by a discovery that the retailer had overstated income by £246m, which wiped £2bn off the company's market value. Tesco agreed to pay £214m last year to resolve regulatory probes into the accounting scandal.

Judge John Royce told the London jury that the prosecution failed to prove that the two executives were aware of any fraudulent activity that may have taken place.

A Tesco accountant who looked through the numbers testified that he himself didn't know about the fraud, Mr Royce said. "The real weakness was this question of proving knowledge," Mr Royce said.

"If he, the gatekeeper, the qualified accountant did not know, how could it be safely asserted that the defendants knew? You would've had to be sure that they knew."

The first trial was halted in February days before the jury was scheduled to begin deliberations. A third defendant, former UK chief financial officer Carl Rogberg, was severed from the current case and the SFO could still make a decision to proceed with charges against him.

Tesco embarked on a sweeping overhaul after the accounting issues came to light. CEO

Dave Lewis, who took over at Tesco in 2014 after the case burst into the open, described a report he was shown after joining as "a way of operating which I had never seen". Tesco declined to comment.

Bloomberg

Irish Independent

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