Mis Leading Share Data Tesco Fined 85 Million
Published / Last Updated on 09/04/2017
Tesco Fined 85 Million Mis-Leading.
The Financial Conduct Authority (FCA) has today confirmed an agreement with Tesco Plc and Tesco Stores Limited to pay compensation for giving a mis-leading impression of the value of Tesco shares and bonds in August 2014.
On 29th August 2014 Tesco released a half year profits forecast for the 6 months to 23rd August 2014 at around £1.1bn. Yet, on 22 September 2014 it issued another release suggesting it had “identified an overstatement of its expected profit for the half year, principally due to the accelerated recognition of commercial income and delayed accrual of costs.”
The result being that in between that time, investors were given a mis-leading position as to the value and dividend expectation for buying Tesco shares. Tesco share prices obviously went up. The FCA has determined that on 29th August when the original forecast was made that Tesco would already have had an idea that profits may not be as high as their published forecast and their share prices fell resulting on losses to investors in between those dates.
Compensation, estimated by the FCA to be in the region of £85 will be paid to investors who bought Tesco stock between 29 August 2014 and 22 September 2014. Given that Tesco has agreed to compensate investors without the need for legal action by investors, meaning that the fine has been discounted.
Did you buy Tesco stocks between those dates? The compensation scheme will launch by 31 August 2017 and will be administered on Tesco’s behalf by KPMG. Further information is available now on KPMG’s website at www.kpmg.co.uk/tesco-scheme.