TSCO Tesco Plc

By Saabira Chaudhuri 

LONDON--The U.K.'s Serious Fraud Office has charged three former Tesco PLC executives with false accounting and abusing their positions, the first charges announced by the office since the investigation began.

The SFO in October 2014 opened its criminal investigation into Tesco after Britain's biggest grocer overstated its profit by GBP263 million due to accounting practices that allowed for the accelerated recognition of promotional income from suppliers, and delayed accrual of costs, at its core U.K. food business. On Friday, the SFO said its wider investigation into Tesco is ongoing.

The scandal forced the resignation of Tesco's then chief executive and chairman, throwing the company into turmoil at a time when it was also facing increased competition from discounters, but under new CEO Dave Lewis Tesco's performance has improved.

The SFO has charged former U.K. finance director Carl Rogberg, former U.K. managing director Chris Bush and former U.K. food commercial director John Scouler with one count of abuse of position and one count of false accounting. The three men must now appear in the Westminster Magistrates' Court on 22 September.

"Tesco continues to cooperate with the SFO's investigation," said a spokesman. "The last two years have seen an extensive program of change at Tesco, but given this is an ongoing legal matter, we are unable to provide any further comment at this time."

The SFO was reported by U.K. media to have interviewed former CEO Philip Clarke last year in relation to the accounting issue. Mr. Clarke couldn't immediately be located for comment. The SFO declined to comment.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

(END) Dow Jones Newswires

September 09, 2016 07:47 ET (11:47 GMT)

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