Tesco shareholders set to launch legal action over accounting scandal
Shareholders in Tesco are poised to launch legal action against the supermarket, claiming they lost tens of millions of pounds after the retailer's accounting scandal.
Group litigation fund Bentham Europe said law firm Stewarts Law is set to launch a claim against Tesco on behalf of a "substantial" number of institutional investors.
It said the investors believe they lost out when shares plunged after the grocer's admission that it overstated profits by £250m.
Shares in Tesco slumped by over 20pc in September 2014 after it revealed the accounting issues.
It was first estimated to be a £263m hole, but was later found to be £63m bigger at £326m.
The Serious Fraud Office launched an investigation in October 2014.
The accounting woes came in a torrid year for the supermarket, which posted a £6.4bn annual loss - one of the biggest in UK corporate history.
Bentham Europe said the group shareholder action "will seek to prove that misleading statements were made to the market - including by way of omission of material information - and that such statements were relied upon by investors when investment decisions were made by them".
Jeremy Marshall, chief investment officer of Bentham, said: "Tesco's announcement in September 2014 shook the confidence of the market.
"The prospect of litigation is a necessary consequence of the apparent failure of Tesco's former management to protect their shareholders from avoidable losses.
"We hope the company will face up to the seeming failings of previous management and move swiftly to resolve this dispute."
Bentham said it already had between 50 and 100 shareholders signed up to the group action, with more expected to join.
The majority have financial losses running into six-figure sums, but some investors set to join have eight-figure losses, according to Bentham.