Court approves Tesco deal to settle accounting charges

LONDON (Reuters) - A court approved a deal on Monday between Britain's biggest retailer Tesco plc TSCO.L and the country's Serious Fraud Office (SFO) to settle a probe over a 2014 accounting scandal.

FILE PHOTO: Grey clouds hang over a Tesco Extra store in New Malden, London, Britain, June 4, 2014. REUTERS/Luke MacGregor/File Photo

Approval by judge Brian Leveson of the Deferred Prosecution Agreement (DPA), first detailed on March 28, means Tesco will pay a 129 million pound fine and the SFO’s full costs of a two and a half year inquiry.

The DPA relates to false accounting by Tesco’s UK business, Tesco Stores Limited, between February and September 2014.

The scandal sparked the biggest crisis in Tesco’s near 100-year history.

The DPA only relates to the potential criminal liability of Tesco Stores Ltd, and does not address whether liability of any sort attaches to Tesco plc or any employee or former employee of Tesco plc or Tesco Stores Ltd.

Subject to compliance with the terms of the DPA, the SFO’s investigation into Tesco is concluded.

Last month, Tesco also struck a deal with Britain’s Financial Conduct Authority (FCA), agreeing to a finding of market abuse in relation to a trading update published on Aug. 29, 2014, which overstated expected first-half profits by 250 million pounds, mainly because it booked commercial deals with suppliers too early.

That deal will see Tesco pay investors 85 million pounds in compensation.

Tesco, which has been rebuilding since the crisis and a price war that hammered the whole supermarket sector, has said it will take a one-off charge of 235 million pounds in its 2016-17 results, due on April 12, to cover the fine and compensation.

Shares in Tesco were up 2.3 percent at 194 pence at 1518 GMT.

Reporting by James Davey; Editing by Susan Thomas and Mark Potter