By Stuart Alford QC, Daniel Smith and Yasmina Borhani
Following a two-year investigation, Tesco PLC has announced that its subsidiary Tesco Stores Limited (Tesco Ltd) had agreed in principle the terms of a Deferred Prosecution Agreement (DPA) with the UK Serious Fraud Office (SFO), subject to final judicial approval at a hearing scheduled for 10 April 2017 before Sir Brian Leveson PC. The DPA would result in Tesco Ltd paying a £129m fine to the SFO, together with the SFO’s costs. It is also likely to include an admission of criminal liability and an agreed statement of facts, albeit publication of details may be withheld to avoid prejudicing the ongoing prosecution of former Tesco executives.
SFO investigation
The SFO launched its investigation into Tesco Ltd’s accounting practices in October 2014, after the company announced on 22 September 2014 that it had overstated its profits by £263m between February and September 2014, a figure which Tesco Ltd later revised to £326m.
In September 2016, the SFO charged three former Tesco executives with offences of fraud and false accounting. These defendants are due to stand trial at Southwark Crown Court in September 2017.