Tesco’s chief executive has told a court of his 'surprise' and 'shock' to find out that the company’s profits had been misstated by almost £250m.
Dave Lewis was informed of the situation soon after he began in the post in September 2014, the BBC reported.
Lewis has been giving evidence at the trial into alleged fraud involving former Tesco executives Carl Rogberg, Christopher Bush and John Scouler.
All three are accused of fraud by abuse of position and false accounting from February to September 2014, but they deny the charges.
Lewis told jurors at Southwark Crown Court in London that he had had a number of meetings with Bush and one with Scouler, but they had not told him about the issue, according to the BBC.
Lewis said he became aware of the issue when he was called into a meeting with Tesco’s top lawyer Adrian Morris who handed him a document outlining the problem. The document was prepared by Amit Soni from Tesco’s finance department, along with a colleague.
In October Soni told the court that in 2014 Tesco staff were under pressure to hit “insurmountable” financial targets, The Guardian reported. Soni said a process called “pull forward” had been used, whereby projected income from future accounting periods was used to cover up accounting holes and meet financial targets.
Lewis told the court that his reaction to reading the document had been “one of surprise and one of shock, really”.
According to the BBC, he said: 'I think the thing that was unique to this paper was the indication that the numbers that had been declared had a potential misstatement within them.
'What was new was the proposition here that £246m of income had been included in the first half of the year that on that basis of this paper was deemed to be questionable.
“I had never experienced anything like this before, but it was quite clear that having read the paper, and the manner in which it was served, I felt that it had to be taken very seriously.'
Lewis then explained that between Tesco’s public announcement on 22 September and its interim results on 23 October, the supermarket went to great lengths to state that profits had been overestimated and 'validate the number'.
'It was a very intensive amount of investigation of these numbers,” he said. “It required a huge amount of review of paperwork, documentation between pretty much all of the suppliers to Tesco and the different categories in order to validate the number. So that was quite an extensive exercise.'
