Tesco is under criminal investigation by the SFO

The Serious Fraud Office is now probing the supermarket's seemingly never-ending accounting scandal.

by Jack Torrance
Last Updated: 02 Dec 2014

The Serious Fraud Office (SFO) has launched an investigation into Tesco's overstatement of profits, piling the pressure on Britain's biggest retailer. The agency joins the Financial Reporting Council in probing the supermarket's accounts, but a previously announced investigation by the Financial Conduct Authority will now be superseded by the SFO's - presumably so they don't trip over each others toes.

'Tesco has been cooperating fully with the SFO and will continue to do so,' the retailer said in a statement.

Last week its chief executive Dave Lewis announced the results of a Deloitte investigation which had found the total overstated profits to be £263m over the past three years, more than the £250m which was initially reported.

The scandal allegedly relates to the booking of commercial income from suppliers which was never going to be received. Last week Lewis, who is keen to turn a corner from the crisis, dismissed suggestions of  fraud, saying that no individuals had gained financially from the errors.

The news adds to the sense of crisis at Tesco, which has already lost half of its value this year, although shares actually grew slightly this afternoon - suggesting the SFO probe was not exactly unexpected. Last week its chairman Sir Richard Broadbent announced he would be stepping down soon, but more heads may yet roll as this scandal ploughs on.

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