Insider Media Limited
A group of Tesco shareholders seeking compensation from the Hertfordshire retailer has said it intends to pursue the case “vigorously”.
Tesco Shareholder Claims Ltd (TSC), a not for profit group, announced in March that it would seek to bring an action against Tesco as a result of its announcement on 22 September 2014 that it materially overstated its profits.
At the time, TSC said the overstatement, which prompted a sharp decline in the value of the company and drove the share price down to a 14-year low of 164.8p, caused a “permanent destruction of value”.
In a statement today (28 May 2015), TSC confirmed the appointment of renowned barrister Philip Marshall QC to represent the shareholders. He has previously represented Liverpool FC.
The group also confirmed that it has already signed up various institutional investors to join the claim for compensation. It added that while it is too early to predict the ultimate size of the group it is “already clear that the case against Tesco is strong, and will involve a substantial claim”.
TSC, which expects to formally issue a claim later this year, said it intends to demonstrate that Tesco’s repeated overstatements of profit caused substantial losses among its members.
TSC is supported by Scott + Scott, a US litigation firm which brought a similar claim against Tesco in the US. The group intends to instruct law firm McGuireWoods to conduct the litigation in the UK.
TSC chairman John Bradley said: “With the benefit of the advice received from Philip Marshall QC we believe we have a strong case and we wish to pursue it vigorously.”
David Scott, managing partner at Scott + Scott, added: “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.”
Tesco has declined to comment.