Tesco trio charged with fraud

The SFO has charged three former Tesco execs over the £263m accounting 'black hole' scandal.

by Andrew Saunders
Last Updated: 12 Sep 2016

Carl Rogberg, 49, Christopher Bush, 50 and John Scouler, 48 have been charged by the Serious Fraud Office with one count of fraud by abuse of position, and with one count of false accounting.

The charges are in connection with the SFO’s onging investigation into the £263m ‘black hole’ that appeared in Tesco’s accounts back in 2014 and are the first criminal charges to be brought in the case.

Rogberg was the finance director for UK stores, Bush was the UK managing director and Scouler was the food commercial director. All three were suspended in late November 2014 after Tesco was found to have inflated its profits by £263m.

Scouler now works as commercial director at TalkTalk, although he will be on sabbatical until the conclusion of the case.

The SFO has yet to make a decision on charging any of the more senior executives covered by its investigation - such as former CEO Phil Clarke.

It is also possible that Tesco itself could be prosecuted, although under corporate liability laws there is a requirement to show a 'controlling mind' behind any corporate fraud.

The scandal - which led to Tesco reporting its biggest-ever loss of £6.4bn for the year to February 2015 - was found by auditors to be the result of booking scheduled rebates from suppliers before they had been received.

In a statement, the supermarket said, 'Tesco continues to co-operate with the SFO's investigation. The last two years have seen an extensive programme of change at Tesco.'

Fraud by Abuse of Position refers to someone in a position where they are expected to look after the financial interest of others and do not do so. It is contrary to sections 1 and 4 of the Fraud Act, 2006.  False Accounting is contrary to section 17 of the Theft Act 1968.

The trio have been requisitioned to appear at Westminster Magistrates’ Court on September 22nd.
The news comes at the end of a week that has already seen Tesco named the ‘worst run’ company in the UK in an annual corporate governance survey. 


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