Tesco has opened its compensation scheme for shareholders who lost money as a result of the supermarket giant overstating its profits in 2014, with administrators, KPMG, accepting claims until 22 February 2018
The scheme was announced by Tesco plc, with the agreement of the Financial Conduct Authority (FCA), on 28 March 2017 and relates to Tesco’s trading statement of 29 August 2014 regarding its profit outlook for 2014/15. The outlook was later corrected on 22 September 2014.
Compensation is being offered to purchasers of Tesco shares and bonds from 29 August to 19 September 2014. The compensation has been set at 24.5p per share. Interest will be payable at 1.25% per annum if the purchaser is an institutional investor, or 4% per annum for others, eg, retail investors.
If claimants fail to submit their claim by 22 February 2018 they will lose their right to receive compensation.
The cost payable is estimated by both Tesco and the FCA to be around £85m, excluding interest, with an estimated 10,000 investors purchasing 320 million shares during the period.
In 2014 Tesco was hit by an accounting scandal resulting in a £263m ‘black hole’ in its figures due to profits being overstated.
In March this year, Tesco agreed with the Serious Fraud Office (SFO) to pay a £129m fine for the scandal to avoid prosecution.
Three former Tesco executives – finance director Carl Rogberg, UK managing director Christopher Bush and food commercial director John Scouler – were charged with offences including false accounting and fraud by abuse of power.
The trio pleaded not guilty and are due to stand trial on 20 October.
Investors can submit their claim through the online portal which is available here.
