High court approves Tesco DPA

A settlement between Tesco and the Serious Fraud Office has been agreed, and will involve the retail giant paying a £129m fine following their accounting scandal.

Sir Brian Leveson approved the deferred prosecution agreement (DPA) on 10 April 2017.

The DPA was announced last month by Tesco and the SFO, pending high court approval. DPAs were introduced in 2014 and, allow a company to avoid prosecution by meeting pre-arranged conditions. A DPA does not require any admission of blame or wrongdoing.

Tesco admitted to overstating profits by £326m in 2014, and this decision means that Tesco will pay out £235m in order to settle investigations into the accounts.

On top of the £129m fine, Tesco has agreed with the Financial Conduct Authority to pay around £85m in compensation to investors, as well as paying legal costs associated with the agreements.

Dave Lewis, the chief executive of Tesco, said that the agreement allowed the company to move on. “I want to apologise to all those affected. What happened is a huge source of regret to us all at Tesco, but we are a different business now,” he said.

He admitted the Tesco brand had been damaged by the scandal, but emphasised that Tesco was: “committed to doing everything we can to continue to restore trust in our business and brand”.

The SFO said it would not comment on the Tesco DPA due to reporting restrictions.

Speaking about DPAs in general, David Green, director of the SFO said: “We are an investigating and prosecuting organisation, that is what we do. But having been given this new power, which comes from a US model, and has been adapted for this jurisdiction, we will use it only in very specific circumstances.

“Absolutely crucial to those circumstances is that the company has been fully cooperative with us. If a company is totally uncooperative and sort of leads us a merry dance for four or five years by not cooperating with our investigation, I am sure you would agree that it would be almost impossible for us to represent to the judge that the DPA was in the interests of justice. Companies that don’t cooperate will be prosecuted.”