Tesco’s former chief executive Philip Clarke will not face any charges for his role in the accounting scandal that plagued the company in 2014, said Clarke’s lawyer, according to the Financial Times.
Clarke was Tesco’s boss when it emerged that the supermarket chain had overstated its profits by an initial £263 million ($326 million), a figure that eventually rose to £326 million once the dust had settled.
Until now, Clarke has been subject to the investigations of the Serious Fraud Office, which is leading proceedings, but he has now been told he will not be subject to any charges.
Clarke’s lawyer, David Corker said that “following a thorough review of the evidence obtained … it has been decided not to initiate criminal proceedings on the grounds there is insufficient evidence to provide a realistic prospect of conviction.”
The decision not to charge Clarke is an important one, as it suggests that it is unlikely Tesco as a whole will be charged with any offences. Under UK law, there must be a so-called “directing mind” — basically a senior executive or board member — behind corporate fraud for an entity to be charged.
Neither Tesco nor the Serious Fraud Office immediately responded to a request for comment.
In September, former executives Carl Rogberg, Christopher Bush, and John Scouler were all charged with one count of fraud by abuse of position, and one count of false accounting during an investigation into accounting practices at the company.
Rogberg, 49, was Tesco UK’s Finance Director between 2007 and 2010, and according to his LinkedIn page, currently works as the Managing Director of Church Farm Industries, a retail consulting business.
John Scouler worked as the UK Commercial Director of Tesco between 2013 and 2014. He is now employed as the Commercial Director of FTSE 250 communications provider TalkTalk, according to his LinkedIn page. Bush was the company’s UK Managing Director.
The three will face trial in September next year. It is unclear whether any of the three men could be considered a directing mind in this case.
Tesco is currently facing a legal claim of more than £100 million from angry investors. 125 institutional funds have brought a joint claim against Tesco, claiming that its actions during the scandal
amount to a breach of the Financial Services and Markets Act and cost them millions of pounds.
The case will argue that Tesco made misleading statements to the markets, which was then relied on by investors to make decisions.