Tesco’s CFO Joins Early as £250m Profit Error is Investigated

23 Sep 2014 --- Tesco has appointed its new chief financial officer with immediate effect, two months earlier than planned. The announcement follows an earlier statement by the supermarket retailer that it had overstated its half-year profit guidance by £250m.

The Board stated that it believed the guidance issued on 29 August 2014 for the Group profits for the six months to 23 August 2014 were overstated by an estimated £250m. Some of this impact includes in-year timing differences. 

Tesco has now launched an investigation into this matter, headed by Deloitte and Tesco’s legal advisors, Freshfields. The company has also suspended four of its executive staff members following the incident, including UK managing director Chris Bush, as well as finance director Carl Rogberg. Its food commercial director John Scouler and head of food sourcing, Matt Simister, are also believed to have been suspended.

Tesco’s new chief executive, Dave 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 new chief financial officer, Alan Stewart, will replace Laurie Mcllwee, who left last week following his resignation in April this year. Stewart moves over from Marks & Spencer, where he also held the title of chief financial officer.