Tesco shareholders may take action
The problems at leading supermarket Tesco could be set to be grow, with some shareholders possibly taking legal action against the company.
A UK law company is calling for shareholders to support a claim against the retailer for its recent failures.
The Financial Times reports Stewarts Law is preparing a legal case on behalf of a number of investors.
Last month, Tesco revealed it had overstated its profits by more than £263 million – which lead to the company’s share values falling by some £2 billion.
The legal firm believes it can act for current and ex-shareholders who held at least 10,000 shares from April 2013 to October 2014, and retained ownership before the three profit statements released by Tesco between August and October 2014.
Stewarts Law plans to issue proceedings against the supermarket chain at the High Court over the next six months.
It will claim that shareholders should be able to receive compensation for any losses caused by possible breaches of the Financial Services & Markets Act 2000.
Sean Upson, partner at Stewarts Law, explained more shareholders are becoming interested in ensuring they are not failed by the market.
“It has been a trend over the last two or three years for investor activism. This has manifested itself at shareholder meetings and people are now starting to use the Act and litigate as a way of getting recompense for losses,” he said.
Tesco has not issued any comment about the proposed court action.
The retailer has had a somewhat turbulent few months after it emerged that previous projections for revenue and profits had been exaggerated.
As a result, a number of key figures at the company stood down, including chief executive Philip Clarke and chief finance officer Laurie McIlwee.
The Financial Conduct Authority (FCA) is currently investigating the matter and Tesco have appointed consultancy Deloitte to assess the accounts.
It is estimated that the gap could total around £263 million, of which £118 million relates to the incorrectly reported first-half profit calculations for the current year.
Stewarts Law is also currently representing around 300 investors against the Royal Bank of Scotland after a possible violation of their rights during the financial crisis of 2008.