Grocery Chain Tesco to Pay $160,256,700 Over Accounting Fraud

By:
Chris Gaetano
Published Date:
Mar 29, 2017
By Robert Edwards, CC BY-SA 2.0

International grocery store chain Tesco will pay a fine of  $160,256,700 (or £129 million) to settle charges related to widespread accounting fraud that, when it became unsustainable, led the company to admit it had overstated its profits by $338 million (£263 million), according to the Guardian. Tesco, in 2014, was found by UK authorities to have manipulated earnings figures through abusing rebates with suppliers: a company policy allowed stores to receive rebates from suppliers if the store could clear a certain volume by a specified time. A summary of the matter by The Financial Times said that stores, despite not meeting these sales targets, would claim these rebates anyway and promise suppliers extra benefits in the future. The fine is part of a deferred prosecution agreement that still requires court approval. Combined with separate orders to pay investors affected by the scandal $105,504,550 (£85 million), plus legal costs associated with the agreement, the company is expected to have to pay a total of $291,689,050 (£235 million), according to the Guardian. Interim financial results posted in October said that the company had $33,859,780,500 (£27.3 billion) in revenues, up 1.4 percent, and profits of $88,061,300 (£71 million), down 28.3 percent. 

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