Ex-Tesco managers accused of greatly overstating company's profitsStaff Writer |
Europe Bush and Scouler were described as "generals"
Two former Tesco senior managers have gone on trial accused over an alleged fraud that saw the company's profits overstated by a quarter of a billion pounds.
Bush and Scouler were described as "generals" with those working below them referred to by prosecutor Sasha Wass QC as "footsoldiers", who she said were "pressurised and coerced" into carrying out such a practice.
The jury at Southwark Crown Court was told the case is a retrial, and that a third man, Carl Rogberg, is charged with identical offences but is currently not well enough to stand trial.
Wass said: "The prosecution case in a nutshell is that the defendants, together with Rogberg, were aware that income was being wrongly included in the financial records of the company which were used to inform statements to the stock market.
"They were aware that this was being done in order to meet targets so that the company would look financially healthier than it was.
"They were aware that this wrongly included income would result in Tesco's trading profit and share price being overstated."
Tesco made a public announcement to the stock market in September 2014 saying profits had been overstated in a statement the previous month by approximately GBP250 million, the jury was told.
Wass said that revelation had caused "shockwaves to run through the stock market", resulting in the company's shares plummeting by nearly 12% and wiping GBP2 billion off the share value.
She said it happened at a time when Tesco was facing challenges from budget rivals such as Aldi and Lidl.
Wass added: "Tesco was experiencing a drastic reduction in both profits and market share."
The jury heard that investigations had found that by September 2014 "400-600 of the buyers, almost everyone across Tesco, had been involved in falsifying their records by improperly recognising income".
Scouler, 50, of St Albans, and Bush, 52, of High Wycombe, each deny one count of fraud and another of false accounting.
They and Rogberg at the time had benefits packages with Tesco of more than GBP1 million each.
The trial, before John Royce, continues. ■
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