A group of Tesco shareholders seeking compensation from the supermarket claim the troubled supermarket “committed serious violations” by overstating its profits.
Tesco Shareholder Claims Limited (TSC), which launched proceedings in March this year, argues there is a “strong case” and that the ultimate claim will be “substantial”.
Back in September, the supermarket’s incoming boss Dave Lewis admitted it had overstated its profits by £250m (though this figure later rose to £263m), prompting a number of external and internal investigations and a swathe of departures from the top team.
This group of shareholders believe they can prove this resulted in unfair financial losses for them, arguing that senior management figures at the supermarket were “likely responsible” for misleading shareholders.
The case is supported by the leading litigation firm Scott + Scott LLP, which brought a similar case against Tesco in the US. In terms of legal costs, the members of the TSC will not have to contribute unless the claim is successful.
David Scott, Managing Partner at Scott + Scott LLP, said:
“The advice we have received comes as no surprise. Our investigation over the last few months has shown that Tesco committed serious violations when it overstated its profits. We intend to pursue Tesco in order to help our clients recoup their losses.”
The TSC has been advised to pursue claims by QC Philip Marshall. It is too early to predict the full number of shareholders that will seek compensation.
Tesco was unavailable for comment. The retailer’s share price edged down by 0.61 per cent to 215.67 pence per share following the news this morning.