Former Tesco managers on trial accused of overstating company profits
Two former senior managers at Tesco have gone on trial accused of an alleged fraud that resulted in the company's profits being overstated by a quarter of a billion pounds.
Chris Bush, former managing director for the UK, and John Scouler, a former UK food commercial director, were aware that income was being wrongly included in the supermarket chain's financial records to meet targets and make Tesco look financially healthier than it was, a court heard.
Bush and Scouler were described by the prosecution as "generals", with those working below them referred to as "footsoldiers".
Sasha Wass QC, for the prosecution, said the "footsoldiers" were "pressurised and coerced" into carrying out the alleged fraud.
The jury at Southwark Crown Court was told the case is a retrial, and that a third man, Carl Rogberg, has been charged with the same offences but is currently not well enough to stand trial.
Ms Wass said: "The prosecution case in a nutshell is that the defendants, together with Mr Rogberg, were aware that income was being wrongly included in the financial records of the company which were used to inform statements to the stock market.
"They were aware that this was being done in order to meet targets so that the company would look financially healthier than it was.
"They were aware that this wrongly included income would result in Tesco's trading profit and share price being overstated."
The jury heard that in September 2014 Tesco revealed that it had overstated its profits by some £250m for the first half of its financial year.
Ms Wass said that revelation had caused "shockwaves to run through the stock market", resulting in the company's share price plummeting by nearly 12pc and wiping £2bn off the supermarket's value.
She said it happened at a time when Tesco was facing competeition from budget rivals Aldi and Lidl.
The jury was told that investigations into the alleged fraud had found that "400-600 of the buyers, almost everyone across Tesco, had been involved in falsifying their records by improperly recognising income".
Scouler, 50, of St Albans, and Bush, 52, of High Wycombe, each deny one count of fraud and another of false accounting.
The trial continues.
