SAN FRANCISCO, Oct. 24, 2014 (GLOBE NEWSWIRE) -- Hagens Berman Sobol Shapiro LLP, a national investor-rights law firm is strengthening its investigating of accounting fraud, on behalf of purchasers of the American Depositary Receipts ("ADRs") of Tesco PLC ("Tesco" or the "Company") in light of Tesco's admission that the accounting violations go back to fiscal year 2011-12.
Any purchasers of Tesco ADRs between 2011 and October 23, 2014, and whistleblowers, may contact Hagens Berman Partner Reed Kathrein, who is leading the firm's investigation, by calling (510) 725-3000, emailing TSCDY@hbsslaw.com or visiting http://hb-securities.com/investigations/TSCDY.
On September 22, 2014 Tesco disclosed that the Company was investigating an overstatement of its 2015 profit forecast by approximately $408.8 million. According to Tesco, the overstatement resulted from an accounting error related to revenue that was booked early and also by delayed recognition of costs. The Company's CEO told reporters that the error was discovered by a "commercial manager", who informed the firm's legal counsel after uncovering the error during preparations for the forthcoming first half results. At least eight senior executives have been suspended pending the conclusion of the Company's investigation and the matter is under investigation by Britain's Financial Conduct Authority.
On September 23, 2013 Tesco disclosed that Deloitte LLP found that profits were overstated by £118m in the first half of this year, by £70m in the 2013-2014 financial year and by £75m before that. The current and prior practices appear to be linked as income pulled forward grew period by period, Tesco said.
While the Company said Deloitte found no evidence of fraud, the company is withholding payments to the suspended executives and former CEO and CFO pending the outcome of the Financial Conduct Authority investigation into the overstatements.
Tesco ADRs dropped from as high as $18.70 in 2013 to as low as $8.70 on October 23, 2014.
"We have seen similar frauds in the past." said Mr. Kathrein. "When business starts slowing down, executives get creative with accounting in order to buy time. Unfortunately, it rarely works and investors are hurt."
See Hagens Berman's related analysis of Tesco at http://www.meaningfuldisclosure.com/.
Whistleblowers: Persons with non-public information regarding Tesco should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. For more information, call Reed Kathrein at (510) 725-3000 or email TSCDY@hbsslaw.com.
Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in nine cities. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes can be found at www.hbsslaw.com. Read the firm's Securities Newsletter at http://www.hb-securities.com/newsletter.
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