Top story

The Financial Reporting Council (FRC) has announced the closure of its investigation into Tesco’s accountancy scandal, putting an end to a six-year-long investigation.

In September 2014, the FRC began looking into accountants working with Tesco in relation to an overstatement of profit of around £250m for the years ended 2012, 2013 and 2014.

The FRC had previously closed two investigations into Tesco’s former CFO and auditors, while proceedings were paused pending the Serious Fraud Office’s (SFO) trial of three senior Tesco employees on charges relating to the overstatement. All three were subsequently cleared. 

“Following the conclusion of the SFO proceedings, and consideration of relevant material and information subsequently obtained from the SFO, Executive Counsel has decided to discontinue the matters in relation to each of the remaining subjects,” said the FRC.

“Accordingly, the matter has been closed without service of a Formal Complaint.”

The scandal emerged shortly after CEO Dave Lewis took the helm at Tesco in 2014, sending the supermarket into a crisis and wiping £2bn off its market share. 

Morning update

The Restaurant Group has confirmed it is holding discussions with landlords regarding potential restructuring of it leisure estate as a result of the challenges brought on by the coronavirus crisis. 

The group issues these comments in response to press speculation, with media outlets reporting on probable closures of several of its casual dining chains. 

“As is widely understood our industry is facing exceptional challenges in what is an unprecedented operating environment,” the company said.

“The casual dining sector was already facing significant challenges prior to the onset of Covid-19, with overcapacity and significant cost pressures.”

The business noted that its Wagamama, Airport Concessions and Pub operations were not affected by the ongoing discussions.

The FTSE 100 started the day down 0.6% at 6,442.77pts.

Fallers included Bakkavor, down 6.7% at 82.54p, Compass Group down 2.2% at 1,306.73p and Cranswick down 1.9% at 3,518.67p.

In the green, Marston’s was up 4.8% at 72.95p, McBride surged 2.5% at 67.46p and Greencore started the day up 1% at 149.30p.

This week in the City

It looks to be a relatively quiet week for scheduled announcements in the food and drink sector this week.

British American Tobacco will update the City on its full year trading tomorrow morning.

B&M European Value Retail is scheduled to release its full year results on Thursday, while Fuller’s Smith & Turner releasing a trading announcement on the same day.

Perhaps the most notable event of the week is Morrisons’ annual general meeting on Thursday, where the supermarket faces a shareholder revolt over its executive pay packages.

On Friday, Bakkavor will hold its AGM.

The Grocer Price Index for May will be published on Friday, while the BRC-KPMG Retail Sales survey for May is out tomorrow.