CHESHUNT, ENGLAND – Britain’s Serious Fraud Office (SFO) has begun a formal criminal investigation into Tesco’s accounting errors.
As we reported previously, Tesco released its 2014/15 Interim Financial Results last week, which showed that the retailer overstated its profits by £263 million (roughly $421.70 million). That error had already led to the suspension of eight senior staff members, as well as the resignation of Chairman Sir Richard Broadbent, while the matter is investigated, though Tesco did state that there was no suspicion of wrongdoing on their parts.
Reuters UK reports that for the SFO to launch a full criminal investigation against a company or individuals it has to be satisfied that there are reasonable grounds to believe that conduct might involve serious fraud or bribery. Tesco says that it has been "co-operating fully" with the SFO, according to BBC News.
Simon Gompertz, a business correspondent for BBC News, said in an analysis that this is a major blow for Tesco. Those found guilty of fraud can be sentenced to up to 10 years in prison and the company could face unlimited fines, Gompertz states.
Robert Amaee, a partner at law firm Covington & Burling and former head of anti-corruption and head of proceeds of crime at the SFO, told the BBC, “The SFO will no doubt be engaging with the new management to review the scope and focus of Tesco’s ongoing internal investigation, and the steps taken for example in relation to the preservation of documentary evidence, and the interviewing of witnesses, some of whom have already been suspended by the company.”
The process could take years, with the agency taking months to sift through huge quantities of digital data and other evidence, while looking to identify and trace witnesses, according to Reuters. At the end of the process, the investigation could still find nothing criminally amiss.
Stay tuned to AndNowUKnow for the latest on this developing investigation.
