Tesco faces shareholder damages claim profit overstatement

Tesco is facing a "substantial" shareholder damages claim in the UK over the £263 million (€369 million) profit overstatement that plunged Britain's biggest retailer into crisis last year.

A vehicle set up by US law firm Scott and Scott to explore legal action in the UK and Europe said in a statement Thursday that it intends to “pursue claims vigorously on behalf of affected shareholders.”

The group, launched in March and known as Tesco Shareholder Claims Limited, has hired a senior British lawyer, Philip Marshall, to provide advice.

It said it had also signed up “various institutional investors” to join the compensation claim, though did not name them in the statement.

Last year’s profit overstatement prompted a wave of inquiries, including by the Serious Fraud Office.

The company's chief executive officer Dave Lewis, who took over after the mis- reporting scandal, has since set out a radical plan to restore its fortunes after a series of profit warnings.

Bloomberg