Tesco boss Dave Lewis was kept in the dark about inaccuracies in the grocer’s 2014/15 half-year accounts, a court heard today.
Giving evidence at the trial of three former Tesco executives, Lewis said he first became aware of issues regarding the figures on September 19, 2014, almost three weeks after he had been drafted in to replace Philip Clarke as boss of Britain’s biggest retailer.
As reported by Reuters, Lewis told the jury that between joining Tesco on September 1, 2014, and being made aware of the profit overstatement 18 days later, he had met with former UK boss Christopher Bush a number of times.
He told the court that Bush had also attended executive committee meetings, but no issues with the accounts were raised on any of those occasions.
Bush is accused of fraud and false accounting, along with former UK finance director Carl Rogberg and ex-UK food commercial director John Scouler.
The trio deny wrongdoing and have all pleaded not guilty to the charges.
The case centres on Tesco’s revelation on September 22, 2014, that it had overstated profits by £250m, mainly as a result of booking commercial deals with suppliers too early.
Lewis told the court how he reacted with “surprise and shock” when he was told of the problems by Tesco’s chief legal counsel Adrian Morris.
The jury heard how Morris presented Lewis with a white paper commissioned by Amit Soni, a senior accountant at the grocer, who has been described by the prosecution as a whistleblower.
Lewis told the court: “The thing that was unique to this paper was the indication that the numbers that had been declared had a potential misstatement within them.
“What was new was the proposition in here that £246m of income had been included in the first half of the year that on the basis of this paper was deemed to be questionable.”
Despite joining Tesco from FMCG giant Unilever on September 1, 2014, Lewis told the jury it was “not until the morning of the 19th” that anyone raised any issues with him.
Tesco’s disclosure to the stock market three days later sparked a slump in its share price and plunged the business into a reputational crisis.
The trial is expected to last beyond Christmas.