Tesco has announced in a statement issued this morning that the appointment of its new Chief Financial Officer, Alan Stewart, has been brought forward to today, 23rd September, as a scandal over the overstatement of profits at its UK operation intensifies.
"Further to Tesco PLC’s announcement on 28 July 2014, the Company announces that Alan Stewart will join the Board as Chief Financial Officer with effect from 23 September 2014, rather than the previously announced date of 1 December 2014," the statement read.
Tesco announced yesterday that it has overstated its profits by £250 million (around €317 million), due to “the accelerated recognition of commercial income and delayed accrual of costs.”
The nature of this 'commercial income' is yet to be determined, however the fact that Tesco has suspended four top executives, including Chris Bush, its UK chief executive, indicates that the problem may run deeper than a mere accounting error.
Tesco's new chief executive Dave Lewis has promised the most "fullest and deepest investigation possible" into the scandal, with an internal investigation set to be undertaken by Deloitte and Freshfields.
As Neil Saunders of retail consultancy Conlumino put it, "Mistakes do happen, but this gives the impression of a company that is not in full control of its internal procedures. It is just not what you expect from a company as large as Tesco.
"More significantly, it means that performance - which is already extremely weak - is actually much weaker than anticipated. This is something that will alarm investors and means that Tesco has much further to travel to recovery than first thought."
© 2014 - Checkout Magazine by Stephen Wynne-Jones