- 3 charged with fraud by false accounting and of fraud by abuse of position following a £250 million Tesco accounting scandal in 2014; Prosecutors alleges trio told staff to “pull forward” projected income from future accounting periods to cover up holes and meet unrealistic targets; “The defendants carried on conniving and manipulating the figures by incorrectly encouraging others to pull forward income,” said a prosecuting lawyer.
- Reuters / Hannah McKay
LONDON – Three former Tesco executives allegedly “connived and manipulated figures” to cover up a £250 million black hole in the supermarket’s accounts, a court heard on Monday.
Former Tesco UK managing director Christopher Bush, former UK finance director Carl Rogberg, and former food commercial director John Scouler are standing trial for fraud by false accounting and of fraud by abuse of position at Southwark Crown Court in London.
They were charged last year after Tesco was found to have inflated its profits by nearly £250 million in 2014, a revelation which the court heard on Monday sent “shock waves” through the stock market and wiped billions from the firm’s value.
Opening the case for the prosecution on the second day of proceeding, Serious Fraud Office (SFO) lawyer Sasha Wass QC told Southwark Crown Court that the three former executives told staff to “pull forward” projected income from future accounting periods to cover up accounting holes and meet financial targets.
Wass said the “pull forward” technique was intended “to make it look like you were hitting the targets, whereas in reality you were not.”
“Terms such as ‘pull forward’ […] were Tesco’s internal jargon, used by those in the know to describe the falsification of figures,” Wass said.
The jury was told that the “pull forward” practice was “contrary to proper accounting standards and principles.”
“The defendants must have been fully aware of the damage this practice was having on the finances of the company, and more particularly on shareholders,” Wass said.
The court heard that attempts by colleagues to persuade the defendants to lower financial targets “had been unsuccessful.”
“The defendants carried on conniving and manipulating the figures by incorrectly encouraging others to pull forward income,” Wass said.
The case opened on Friday. Prosecuting lawyer Sasha Wass QC said the three men were “jointly responsible for falsifying figures,” according to Sky News. The prosecution alleged on Friday that the trio “bullied and coerced” people they managed at Tesco.
The trio were formally charged by the SFO last year. Lawyers acting for the trio have already pleaded not guilty.
Bush, Rogberg, and Scouler were part of the so-called “Cheshunt Eight,” a group of senior Tesco employees who all left the company following the 2014 scandal.
The trial is expected to last between 10 and 12 weeks. Former Tesco chairman Richard Broadbent is expected to give evidence.