Tesco has agreed in principle to pay £129 million to the Serious Fraud Office in the second high-profile deferred prosecution agreement to be announced this year.
The deal, announced today, is subject to judicial approval at the High Court, with a hearing listed for 10 April before Sir Brian Leveson QC, president of the Queen's Bench Division.
The announcement follows a two-year SFO investigation in relation to alleged false accounting by Tesco Stores Ltd. The activity, in which profits were alleged to have been overstated by £263m, occurred between February and September 2014.
In a statement to the London Stock Exchange today, Tesco Plc said it had co-operated with the investigation and had undergone an ‘extensive’ period of change.
It also said it had agreed a deal with the Financial Conduct Authority to compensate shareholders in the sum of around £85m, excluding interest.
According to Tesco, each net purchaser of shares will be entitled to compensation of 24.5p per share purchased, plus interest at 1.25% for institutional investors or 4% per annum for retail investors.
Dave Lewis, Tesco Group chief executive, said: ‘Over the last two and a half years, we have fully cooperated with this investigation into historic accounting practices, while at the same time fundamentally transforming our business. We sincerely regret the issues which occurred in 2014 and we are committed to doing everything we can to continue to restore trust in our business and brand.’
If approved, this will be the fourth DPA to be reached in the UK since the procedure became available in 2014. Earlier this year, engineering giant Rolls Royce agreed to pay £670m to avoid prosecution over corruption allegations.