Tesco faces $12m settlement

Tesco is also dealing with a smaller US-based shareholder claim
Tesco is also dealing with a smaller US-based shareholder claim

Tesco has said it will pay $12 million (£8m) to settle a class-action lawsuit stemming from an accounting scandal that rocked the supermarket last year.

The firm does not admit liability but will pay out to American shareholders - owners of American depositary receipts - to settle the claim, subject to confirmation by a federal court in New York.

These shareholders hold about two per cent of Tesco’s shares.

The retailer is also dealing with a second claim with shareholders in Ohio, with less than 0.2 per cent of its shares, which it is yet to settle.

The scandal surfaced last September when new CEO Dave Lewis said previous payments from suppliers had been moved around to different periods in its profit-and-loss figures, going back at least as far as 2012/13.

This bumped up first-half profits last year by £250m, which on closer inspection a month later was raised to £263m.

The affair led to the departure of a number of senior managers and an ongoing investigation by the Serious Fraud Office.

The supermarket said: “This agreement, if confirmed, will settle one of two claims before US courts arising out of the commercial income overstatement.”