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Tesco pays out £235m over black hole in books

Hit with fine: Tesco: PA
Hit with fine: Tesco: PA

Tesco today moved to draw a line under the worst scandal in its history by agreeing to pay out £235 million in fines and compensation after the investigation of a black hole in its books.

Chief executive Dave Lewis said Britain’s biggest supermarket chain had reached a deal in principle with the Serious Fraud Office.

The retailer’s UK subsidiary, Tesco Stores Ltd, will pay a £129 million penalty but escape prosecution. The deferred prosecution agreement is not an admission by Tesco that it or its staff committed a criminal offence.

Nor does it affect the case of three former senior Tesco executives who face a fraud trial in September. They have denied the charges.

The retailer also faces legal costs, and it has set aside £85 million to compensate investors who bought Tesco shares and bonds soon after a “misleading” statement to the City in August 2014. The next month it emerged that profits had been overstated by £263 million, later upgraded to £326 million.

Mr Lewis said: “We have fully cooperated with this investigation. We are committed to doing everything we can to restore trust in our business.”