Tesco, Britain’s largest retailer by revenue, has suspended four executives and launched an accounting investigation after admitting that its half-year profit was overstated by $407 million.
The accounting irregularity led the company to issue today its third profit warning in two years. The announcements shocked investors, with shares falling 8.8 per cent to 209.40 pence in early trading today.
The investigation, prompted by information from a whistleblower, comes less than a month after the new chief executive, Dave lewis, took charge. The company has faced intense competition as retailers cut prices to attract customers hit by tough economic times. “We have uncovered a serious issue and have responded accordingly,” lewis said in a statement.
lewis took over from Philip Clarke after the company issued a profit warning at the end of August. At the time, Tesco said it expected to report “trading profit” of about 1.1 billion pounds for the six months ended August 23.