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Retail

Tesco Criminal Probe Heads Toward Conclusion, Prosecutor Says

A criminal probe of Tesco over a multi- million-pound profit misstatement may be concluded by the end of this year, according to the director of the UK Serious Fraud Office.

“I would hope that we will see some sort of resolution on Tesco this calendar year,” David Green said in an interview on Tuesday, declining to comment further.

The SFO started investigating Tesco in October, after the grocer said it had overstated profits by £263 million. Nine senior managers were put on leave, at least six of whom have since been dismissed or left.

The UK Financial Reporting Council and Groceries Code Adjudicator are also probing the company.

Tesco has gone to great lengths to cooperate with the SFO’s investigation, even conducting exit interviews with executives involved in the scandal by mail rather than in person to avoid interfering with the case.

The level of cooperation and the speed of the SFO probe may point toward a potential deferred prosecution agreement. Green said Tuesday that he’s expecting there to be at least two DPAs this year.

A spokesman for Tesco declined to comment.

Under such an agreement, a prosecution is suspended for a period of time in return for a company cooperating and agreeing to a number of conditions that can include paying a fine, repaying profits, and helping bring cases against individuals. DPAs were only introduced in the UK in 2014.

The scandal at Tesco emerged shortly after new Chief Executive Officer Dave Lewis took charge in September.

Despite attempts to revive the company and cut prices by hundreds of millions of pounds, the largest UK grocer has lost market share.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here

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