Tesco shareholders set for courts over accounting row

Group litigation fund Bentham Europe said law firm Stewarts Law is set to launch a claim against Tesco on behalf of a “substantial” number of institutional investors.

It said the investors believe they lost out when shares plunged after the grocer’s admission that it overstated profits by £250 million.

Shares in Tesco slumped by over 20% in September 2014 after it revealed the accounting issues.

It was first estimated to be a £263 million hole, but was later found to be £63 million bigger at £326 million.

The Serious Fraud Office launched an investigation in October 2014.

The accounting woes came in a torrid year for the supermarket, which posted a £6.4 billion annual loss - one of the biggest in UK corporate history.

Bentham Europe said the group shareholder action “will seek to prove that misleading statements were made to the market - including by way of omission of material information - and that such statements were relied upon by investors when investment decisions were made by them”.

Jeremy Marshall, chief investment officer of Bentham, said: “Tesco’s announcement in September 2014 shook the confidence of the market.

“The prospect of litigation is a necessary consequence of the apparent failure of Tesco’s former management to protect their shareholders from avoidable losses.

“We hope the company will face up to the seeming failings of previous management and move swiftly to resolve this dispute.”