Tesco staff ‘quit as fears of accounts fraud grew’

Wednesday 11th October 2017 06:02 EDT
 
 

Amid raising concerns about accounting practices at the retailer, two Tesco employees have resigned. The resignations came to light on the third day of the trial of former executives, Christopher Bush, John Scouler, and Carl Rogberg. Bush, former head of Tesco UK, Soucler, former UK commercial food director, and Rogberg, former UK finance director, are alleged to have inflated Tesco's interim profit forecast in 2014 by improperly recognising income from suppliers. They are also accused of falsifying accounting records and of concealing information from auditors. Each faces a charge of fraud and one of false accounting.

Southwark Crown Court was told that the employees who resigned in the summer of 2014 were Richard Parsons, a finance project manager, and Aysen Nadiri, an accountant. Sasha Wass, QC, for the prosecution, said that two members of staff “felt so compromised” by the mis-recording of profits that they resigned “rather than engage in what they considered to be practices that were unlawful.” Wass said that Parsons felt so compromised that he “didn't feel able to share what he was going through with his own wife” and that he was aware of colleagues “being in tears”, of some people already having left the company and of concerns that they could lose their accounting qualifications.

Nadiri resigned despite not having another job to go to because she “felt she no longer wanted to be a part of the company” and be in a situation where senior employees were allowing incorrect income to be recorded. “Ms Nadiri became increasingly concerned about the message from senior management because they refused to accept that targets could not be met and they had a disregard... for proper accounting principles. Ms Nadiri said that she was nervous about things going on. She was uncomfortable that things would not stand up to audit and she felt compromised as a financial professional,” Wass said. Senior accountant Amit Soni raised the resignations with Rogberg, saying that people were “having nervous breakdowns”. Wass said, “Mr Rogberg's reaction was, 'Fine, go and hire more people'.”

Soni is said to have been secretly compiling a report on the payments brought forward by Tesco from suppliers, and sent an email on September 3, 2014, telling colleagues that the “whistle is about to blow.” The secret report was allegedly later shown to the defendants, but frustrated by their reaction, he passed the report to the retailer's legal department, where a colleague was said to be “Staggered”.

The report which allegedly identified a £250 million hole in Tesco's accounts, was sent to Dave Lewis, chief executive of Tesco, who was in a “complete shock” after reading the contents.


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