UK: Tesco Chairman Resigns After $420 Million Accounting Scandal
October 27, 2014 | 1 min to read
The bloodbath at Tesco Plc continues.
The U.K. supermarket chain, the world’s second-biggest retailer after Wal-Mart Stores Inc. and one of Warren Buffett’s least-successful billion-dollar investments, said Thursday its chairman Sir Richard Broadbent would step down, after an accounting scandal that masked the scale of financial problems caused by aggressive competition and a series of PR disasters.
The company confirmed in a restatement of its figures for the first half of the 2015 fiscal year that it had overstated profits by a total of 263 million pounds ($421 million), by deferring costs and accelerating recognition of income. The scale of the overstatement is marginally above the initial estimate of 250 million pounds. What was new Thursday was the admission that the practice had been going on for more than a year and was growing. Over a quarter of the sum dated back to before the group’s 2013-4 fiscal year.
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