The Financial Conduct Authority (FCA) has notified Tesco that it has commenced a full investigation following the overstatement of expected profit for the half year which was described in the company’s announcement of 22 September 2014 and which is currently the subject of an independent review by Deloitte.
Tesco will continue to co-operate fully with the FCA and other relevant authorities considering this matter, Tesco said.
During its final preparations for the forthcoming interim results, Tesco identified an overstatement of its expected profit for the half year, principally due to the accelerated recognition of commercial income and delayed accrual of costs.
On the basis of preliminary investigations in to the UK food business, the Board believes that the guidance issued on 29 August 2014 for the Group profits for the six months to 23 August 2014 was overstated by an estimated £250m. Some of this impact includes in-year timing differences. Work is ongoing to establish the extent of these issues and what impact they will have on the full year.