Former Tesco boss tells court of 'serious' impact of misstated profits

The consequences of having to inform the market that Tesco had over-stated its profits were "serious", the former chairman of the supermarket has told a court.

Sir Richard Broadbent told jurors at Southwark Crown Court that it was "very important" to ensure the correct figures were published.

Giving evidence at the trial of three men accused of misleading the market, Sir Richard explained he had no idea of there being an issue until the CEO Dave Lewis called him and said "Richard, we've got a problem".

Carl Rogberg, 50, Chris Bush, 51, and John Scouler, 49, are all charged with fraud by abuse of position and false accounting between February and September 2014.

The supermarket's former finance chief, managing director and food commercial head were investigated for their alleged role in an accounting scandal in which Tesco was found to have inflated its profits.

Jurors heard that Sir Richard was in Rome when Mr Lewis phoned him to say that a document prepared by a senior accountant at Tesco revealed a gap of £246 million in the figures.

Sasha Wass QC, prosecuting, asked Sir Richard what the consequences were of having to announce to the market on September 22 2014 that Tesco had previously overstated its profits by around £250 million.

He replied: "The consequences would have been serious - the impact - it was an important statement."

Asked how important it was to make the corrective statement, Sir Richard continued: "Very important. I think one could not possibly have not made the announcement with the knowledge that had come to the board's attention."

The court heard that in August, before the inaccurate profit warning was published, Sir Richard had a meeting with Bush where no issues were flagged with him.

He was asked: "Had Mr Bush said anything to you about failing to meet the targets in half one, or missing the targets, or a gap in the target?

"Would you have been interested in that?"

Sir Richard said: "Yes."

He continued: "I don't have a recollection of Chris specifically saying to me 'we are going to miss this target'."

Rogberg, of Chiselhampton, Oxfordshire, Bush, of High Wycombe, Buckinghamshire, and Scouler, of St Albans, Hertfordshire, all deny the charges.

Sir Richard will continue giving evidence when the trial resumes at 10am on Thursday.

Copyright (c) Press Association Ltd. 2017, All Rights Reserved.