News that former Tesco CEO Philip Clarke is to be interviewed under caution by the Serious Fraud office is the major grocery story in the papers today.
Bloomberg reported yesterday that Clarke and ex-commercial director Kevin Grace will be interviewed under caution over Tesco’s £250m profit overstatement last year. Former U.K. finance director Carl Rogberg was interviewed earlier this summer, according to one person, while ex-head of U.K. operations, Chris Bush, also received an SFO request.
The Telegraph explains: “Both would be spoken to as potential witnesses, however they will be under caution, meaning anything Mr Clarke and Mr Grace say can be used in court at a later date.”
Under new powers introduced last year, the SFO can offer a “deferred prosecution agreement” (DPA), which requires high court approval. It includes fines and other undertakings, if that is considered to be in the public interest and a company cooperates. (The Guardian). “There has been speculation that the prosecutor may settle with the company using a US-style non-prosecution agreement,” writes The Times (£). While The Daily Mail comments: “The probe could hardly come at a worse time for new boss Tesco Dave Lewis, who has been at the helm for almost exactly a year but has failed so far to arrest the supermarket’s decline.”
Tesco plans to receive a Won1tn ($844m) dividend from its Korean business as a way to cut the asking price for Homeplus in an unusual move that reflects the UK company’s eagerness to agree its Won7tn sale, writes the FT. The planned dividend payment will cut the sale price by Won1tn to Won6tn. “The changed deal structure is seen as Tesco’s attempt to seal the deal by easing the financial burden for a potential buyer while reducing its tax burden for the expected profit from the deal,” said a person close the deal. (The Financial Times £)
Nomad Foods, the new owners of Birds Eye and Findus’ European assets, has said that it is hungry for more deals. Nomad, which was set up as a cash vehicle by consumer goods tycoons Martin E Franklin and Noam Gottesman, said that revenues fell by 2.4% in the year to the end of June. (The Telegraph)
Pernod Ricard missed full-year profit forecasts as the world’s second-largest spirits group by sales reported a softer than expected recovery in China and weak performance in the US, its biggest market. The maker of Absolut vodka and Martell cognac said on Thursday that full-year profit from recurring operations was €2.24bn — 2% higher than the previous year but lower than the 2.5% growth analysts had expected. (The Financial Times £)