Three senior Tesco executives were “clearly dishonest” and had “cooked the books” at Britain’s biggest retailer to mislead the stock market, a court has heard.
Carl Rogberg, 50, Chris Bush, 51, and John Scouler, 49, are alleged to have been involved in a “white collar crime” plot that sent “shock waves through the stock market”.
The three men have all been charged with one count of fraud by abuse of position and one count of false accounting.
Both charges relate to accusations that the company overstated its profits by more than a quarter of a billion pounds in 2014. They could face prison sentences of up to 10 years if found guilty.
Opening the case for the prosecution, Sasha Wass QC said that the three men “were not foot soldiers but generals who were in positions of trust and were paid huge compensation packages”.
Southwark Crown Court heard that income had been “misrepresented” in order to meet financial targets and that the three men were “jointly responsible for falsifying figures”.
The trio are alleged to have “bullied and coerced” people who they managed at Tesco, forcing them to misrepresent trading figures in order to improve the appearance of Tesco’s financial health.
“They didn’t just lie themselves but they encouraged and sanctioned those beneath them to lie. They encouraged the manipulation of profits and pressured others under their control to misconduct themselves in such a way that the stock market was ultimately misled.”
Image: The profit overstatement led to almost £2bn being wiped off the chain’s market value
Bush was formerly the managing director of Tesco UK. Rogberg was the UK financial director while Scouler was the UK food commercial director. All three deny the allegations.
The court heard that Bush’s total pay package, including salary, benefits and shares, was £2.871m in 2014.
Rogberg received £1.021m while Scouler had a package worth £1.42m.
Ms Wass said that each was paid according to their performance and that they were worried about “keeping their jobs in difficult times”.
She said the three men had “connived” to present false information to try to hit “unrealistic” performances targets.
She added that, when the deceit was revealed to the Tesco board, it was “like a hand grenade going off”.
The three men sat together in the dock in Court 2 listening to the case being outlined against them.
The case is expected to last at least three months, with witnesses expected to include the retailer’s chief executive, Dave Lewis.