May 30, 2017 / 2:41 PM / 2 years ago

Tesco CEO called to give evidence in fraud trial of former executives

LONDON (Reuters) - Tesco (TSCO.L) Chief Executive Dave Lewis has been called as a prosecution witness in the trial of three former senior executives accused of fraud and false accounting at Britain’s biggest retailer, a court heard on Tuesday.

Tesco Group Chief Executive, Dave Lewis speaks at an analyst presentation in London, Britain, April 12, 2017. REUTERS/Hannah McKay

Christopher Bush, who was managing director of Tesco UK, Carl Rogberg, who was UK finance director, and John Scouler, who was UK food commercial director, were charged by the Serious Fraud Office (SFO) in September with one count of fraud by abuse of position and one count of false accounting.

Their lawyers have said the three would plead not guilty at a trial set to start on Sept. 4.

At a case management hearing at Southwark Crown Court in London on Tuesday the court heard that Lewis, CEO since September 2014, was among 10 new witnesses called by the crown.

The court heard that other witnesses called include Tesco’s group general counsel Adrian Morris and the head of its internal audit, who was not named.

Tesco declined to comment on Tuesday.

The SFO has said the alleged crimes occurred between Feb. 1and Sept. 23, 2014. Tesco issued a statement to the London Stock Exchange on Sept. 22, 2014, saying that during its final preparations for a results announcement it had identified a 250 million pound overstatement of first-half profit, mainly due to booking commercial deals with suppliers too early. The discovery led to the suspension of eight senior members of staff including Bush, Roger and Scowler; sent Tesco’s shares tumbling; and plunged the company into the worst crisis in its near 100-year history.

The profit overstatement, identified three weeks after Lewis took over as CEO from the sacked Philip Clarke, was later raised to 263 million pounds.

Bush and Scouler attended Tuesday’s hearing, though Rogberg was absent.

The judge set aside days in June and August for further legal argument.

In April a court approved a deal between Tesco and the Serious Fraud Office to settle a probe over the 2014 scandal. That deferred prosecution agreement (DPA) related to the potential criminal liability of the UK subsidiary, Tesco Stores Limited, and no other person.

(This version of the story corrects to remove extraneous information in paragraph three)

Reporting by James Davey; Editing by Susan Fenton

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