Tesco opens £85m compensation scheme for investors hit by accounting scandal
Supermarket giant Tesco has opened an £85 million compensation scheme for the thousands of shareholders who were affected by an accounting scandal three years ago that hit company's share price and prompted a major investigation. The scheme was announced in March 2017 and is being offered to the estimated 10,000 investors that bought into Tesco between 29th August and 19th September 2014.
The compensation has been set at 24.5p per share. Interest will be payable at 1.25 per annum if the purchaser is an institutional investor, or 4% per annum for others, e.g. retail investors.
Claims will have to be submitted by 22 February 2018 otherwise compensation might not be given. The cost payable is estimated by both Tesco and the FCA to be around £84m, excluding interest, with an estimated 10,000 investors purchasing 320 million shares during the period.
In 2014, Tesco was hit by an accounting scandal resulting in a £263m 'black hole' in its figures due to profits being overstated. Reports suggested that Tesco were employing aggressive accounting practices to make it appear that their figures were better than they actually were.