Tesco suspends four executives as it investigates why profits were overstated by £250m
Embattled supermarket chain Tesco has suspended four senior executives, thought to include UK managing director Chris Bush, after appointing accountancy firm Deloitte to investigate a ‘serious issue’ which led to the retailer overstating its half-yearly profits by £250m.
Whilst Tesco will not publically comment on the individuals involved it is believed that Robin Terrell, Tesco’s head of online operations, is being lined up to perform Bush’s duties on a temporary basis.
Tesco had previously suggested that it would enjoy a half-year profit of £1.1bn but this was subsequently substantially marked down, prompting moves to get to the bottom of the discrepancy.
Markets reacted badly to the news with Tesco’s share price collapsing by 10 per cent in early trading, providing a major headache for the chain’s new head, Dave Lewis, who took up post on 1 September.
In a statement Lewis, said: "We have uncovered a serious issue and have responded accordingly. The Chairman and I have acted quickly to establish a comprehensive independent investigation. The Board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear."
The incompetence comes at a bad time for the store which has been suffering from declining sales amidst increasingly fierce competition from discount rivals such as Aldi and Lidl.