Tesco has suspended four top executives after discovering a £250m profit forecast misstatement in its half-year accounts.
Tesco’s share price slumped about 10 per cent after issuing a trading update to the exchange this morning.
The supermarket chain says the group overstated its profit forecast for the six months to 23 August by a quarter of a billion pounds.
The error was due to accelerated recognition of income and delayed accrual of costs, Tesco says.
On a conference call, Tesco chief executive Dave Lewis said “a number” of senior executives have been stood down while an investigation is completed.
UK managing director Chris Bus and UK finance director Carl Rogberg are understood to be two of the censured staff, according to Sky News and Radio 5 Live.
The board says it is working to determine “the extent of the issues” and has enlisted Deloitte and its legal advisers to run an independent review.
Its updated interim accounts will be delivered to the market on 23 October.
Lewis says her and chairman Richard Broadbent moved quickly to set up an investigation into the error.
“We have uncovered a serious issue and have responded accordingly,” he says.
“The board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear.”
Lewis has been in the job since July, when Philip Clarke departed the company after years of poor performance.
The share price was down 8.5 per cent to 209p at 8.40am. It has shed about 40 per cent of its value in the past year.