If Dave Lewis thought his rocky first month as chief executive of Tesco was a one-off he will be severely disappointed today. Just 30 days since he took on the top job it has emerged the FCA, which can prosecute anyone who misleads stock market investors, has launched an investigation into the supermarket chain's £250m accounting scandal.
Britain's biggest supermarket chain was rocked last week by the revelation that four executives, including UK boss Chris Bush, had been suspended after a whistleblower informed Lewis that profits had been overstated by £250m.
In a to-the-point statement today, Tesco said, 'The Financial Conduct Authority (FCA) has notified Tesco that it has commenced a full investigation following the overstatement of expected profit for the half year. Tesco will continue to co-operate fully with the FCA and other relevant authorities considering this matter.'
The news raises the prospect of months of paralysis as the investigation takes its course, limiting Tesco's ability to get its act together.
The company's shares fell by 2.9% in mid-morning trading to 180.78p, and have lost half of their total value in the year-to-date.
Source: Yahoo Finance
Christine Tacon, the Groceries Code Adjudicator, weighed in to the crisis yesterday, urging Tesco's internal investigators to take account of whether there is evidence of the supermarket breaking the code, which governs how large grocers must deal with suppliers. This could lead to Tesco facing another investigation.
The news follows the decision yesterday by Lewis to order head office and other corporate staff to work in stores in the run up to Christmas, in a pr-friendly bid to boost morale. The gesture, dubbed 'Feet on the Floor', will see 4,000 white collar Tesco staff work one day every fortnight in selected stores.
The Times reported today that Lewis is also looking to sell off Blinkbox, the online video streaming site which his predecessor is thought to have plunged hundreds of millions of pounds into while it continued to make losses. Is it a sign the ex-Unilever man is already trying to return the supermarket to its roots?