Tesco dodgy dealings?

[onyx39]

http://www.bbc.co.uk/news/business-29306444

Heard on the news that they had overstated profits by hundreds of millions, and now the MD and three other senior execs have been asked to "step aside"

[essayer]

10% off the shares already

[toppstuff]

Hardly surprising.

An institutionally unpleasant company. I am not a corporation bashing type - I am a fan of capitalism and free markets because IMO the system has delivered unthinkable levels of comfort for hundreds of millions of people, increased life expectancy beyond all reasonable expectations. Capitalism has worked better than any other system in human history.

However, there are two companies in the UK that as far am I concerned have no redeeming features. I dislike them at every level and I can see nothing worthy in anything they do: these companies are Tesco and First Great Western. They operate in a deceitful and duplicitous way with scant regard for their customers or suppliers.

Both are cynically run businesses. A pox on all their houses.

[over_the_hill]

onyx39 said:

http://www.bbc.co.uk/news/business-29306444

Heard on the news that they had overstated profits by hundreds of millions, and now the MD and three other senior execs have been asked to "step aside"

They will be more of those 'highly talented' senior manager types that the country can't function without

No doubt their bonuses and high salaries were profit related but I just can't get my head around why they would try and bump up the figures.

Tesco said:

principally due to the accelerated recognition of commercial income and delayed accrual of costs

So they massively overguessed their income and a few bills finally caught up with them.

[Pesty]

Asked to step aside ?

Questions for me are, if they benefited from this deceit will they face charges.
How much will they be paid to go despite this.

[Wills2]

The commercial income would have been overstated supplier rebates and marketing funding, but £250 million is one hell of a rounding error.

For me it's so large that it has to be incompetence rather than anything deliberately dodgy.

[ralphrj]

Wills2 said:

The commercial income would have been overstated supplier rebates and marketing funding, but £250 million is one hell of a rounding error.

For me it's so large that it has to be incompetence rather than anything deliberately dodgy.

Having worked at a company that suffered something similar in the past, I would say the complete opposite - the correction is so large it had to be the result of deliberate action rather than incompetence.

[Bree]

Clarke going early without any protest makes a whole lot more sense now.

[sleep envy]

ralphrj said:

Having worked at a company that suffered something similar in the past, I would say the complete opposite - the correction is so large it had to be the result of deliberate action rather than incompetence.

Tesco? Up to no good?

I don't believe a word of it.

[Digga]

Bree said:

Clarke going early without any protest makes a whole lot more sense now.

The sad fact is, corporate parasites of his ilk nearly always seem to be able to worm their way into an almost similarly lucrative role, every time.

[oyster]

Digga said:

Bree said:

Clarke going early without any protest makes a whole lot more sense now.

The sad fact is, corporate parasites of his ilk nearly always seem to be able to worm their way into an almost similarly lucrative role, every time.

He's a Tesco lifer - in what way is he a corporate parasite who flips from one lucrative role to another as you're alluding?

[BlackLabel]

Is it not a crime to lie to your shareholders when it comes to things like this?

Anyway, I suppose there is no need for a witch hunt because these guys are clearly just a few bad apples and lessons will be learned after all of this etc etc.

[essayer]

Ironic that it is payments *from* suppliers that have caused this.

Suppliers paying Tesco for the privilege of having their products in their stores..

[Soov535]

I wouldn't like to the PWC partner who signed off the audit!

[Digga]

oyster said:

Digga said:

Bree said:

Clarke going early without any protest makes a whole lot more sense now.

The sad fact is, corporate parasites of his ilk nearly always seem to be able to worm their way into an almost similarly lucrative role, every time.

He's a Tesco lifer - in what way is he a corporate parasite who flips from one lucrative role to another as you're alluding?

What part of the phrase "of his ilk" do you not understand?

There has been a litany of serial executive under-performers who miraculously go from one mediocre performance to another.

[lauda]

Soov535 said:

I wouldn't like to the PWC partner who signed off the audit!

I'm not sure whether these numbers fall within the scope of what has already been audited (I think it is interim/profit forecast information which contains the error) but you I would expect that there are some tense meetings going on at PwC at the moment.

[Justin Cyder]

Interesting times. Obviously no one can pre judge the investigation, but we do know from analysts that under Clarke, Tesco raised non food prices faster than any rival and the wording of the statement this morning translates into suppliers being squeezed harder on payment & promotion funding in order to temporarily at least, force sales into the current period. From a logical standpoint, it has all the hallmarks of a management team trying very hard to funnel revenues in the face of seriously declining sales, which is (sales that is) something we already know.

I'm going with foul play, analytical genius that I am.

[sugerbear]

lauda said:

Soov535 said:

I wouldn't like to the PWC partner who signed off the audit!

I'm not sure whether these numbers fall within the scope of what has already been audited (I think it is interim/profit forecast information which contains the error) but you I would expect that there are some tense meetings going on at PwC at the moment.

So a fine for PcW then back to business as normal. Excellent.

[williamp]

If only they were in the public sector. Then they could just announce e that lessons have been learnt and carry on without any change..

[lauda]

sugerbear said:

So a fine for PcW then back to business as normal. Excellent.

Depends on what assurance they gave on the numbers that contained the error, whether management mislead them or misrepresented information to them and whether they can be found to have been negligent in any way. There's a possibility they should have spotted this and there's a possibility that they can prove they did everything reasonable to detect the error but there was a good reason it wasn't spotted.

Audit assurance isn't, and can never be, 100% assurance. Particularly if you've got a client who is lying to you and purposefully covering stuff up.

Time will tell.