UNDER A NEW MICROSCOPE: Shares in the British supermarket chain Tesco closed down 2.1 percent to 1.73 pounds, or $2.79, on Wednesday after the company confirmed that it is under investigation by the Serious Fraud Office for accounting practices.
Britain’s SFO is an independent government department overseen by the Attorney General. It has the power to investigate and eventually prosecute those who commit crimes involving complex fraud, bribery and corruption.
In a brief statement Wednesday, Tesco said it has been cooperating fully with the SFO, and will continue to do so. The retailer also said the Financial Conduct Authority’s investigation has been discontinued as a result of the new probe. The FCA regulates the financial services industry in the U.K.
Last Thursday, Tesco’s shares lost 6.9 percent after the chain confirmed that the impact of the overstatement of its expected first half profits – an accounting error that Tesco first reported last month – would be 263 million pounds, or $423 million. Tesco had initially estimated that the figure had been overstated by 250 million pounds, or $402 million.
On the same day, Tesco’s chairman Sir Richard Broadbent said he would step down from the firm, calling the profits mis-statement “a matter of profound regret.”