CHESHUNT, ENGLAND - Like many members of the British retail industry, Parliament has some questions it wants answered regarding the recent Tesco £250 million ($408 million) profit report overstatement case. These questions only became more pressing in light of reports published in The Independent claiming that Tesco has lacked a CFO since the departure of former Finance Director, Laurie McIlwee.
The retail and finance communities had been under the impression that McIlwee had been serving Tesco on a part-time basis until it had found a suitable replacement, but Tesco Chairman Sir Richard Broadbent revealed otherwise during a media conference call.
“He’s not in the office because, as I said, he was not directly involved and has not been directly involved in the recent days and weeks,” Sir Richard explained.
“Tesco stated on the 4th of April that until he officially left the company in October, Laurie McIlwee would be available to carry out transitional activities and support handover with colleagues as required,” the company further explained in an official statement. “During the transition period, Laurie has in fact not been called upon by Tesco and has not been involved or had any input to any financial matters or held any position of responsibility in the company.”
Investors are understandably asking if the lack of an official finance director facilitated the $408 million profit overstatement controversy which led to the suspension of four top Tesco executives. According to the Independent, Tesco has explained that a group of “senior finance personnel” has been manning the helm in McIlwee's absence. The question remains however: was that enough?
Parliament may be looking to find this out for itself. According to the Daily Mail, Adrian Bailey, Chairman of the Commons' Business Committee, has said he plans to ‘keep a close eye’ on the matter and that MPs are strongly considering calling on Tesco executives to give evidence on this train of events.
Regardless of what actions Parliament decides to take, CEO Dave Lewis will be tested by this episode. While Lewis, who only took over the position of CEO on September 1st, according to BBC, was not in charge at the time this fraud took place, he will have to nonetheless strive to restore Tesco's place in the retail community.
According to the Daily Mail, Tesco has lost $3.25 billion in market value and 40% of its share value in the wake of this news.
Stay tuned to AndNowUKnow for future updates on the ongoing investigation into these Tesco executives.
