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CHESHUNT, England — Tesco PLC chairman Richard Broadbent plans to resign once a successor is found. The move was announced following the latest revelations about an accounting scandal at Britain’s largest retailer, and the release of disappointing second quarter numbers.
Tesco PLC chairman Richard Broadbent plans to resign once a successor is found. The move was announced following the latest revelations about an accounting scandal at Britain’s largest retailer, and the release of disappointing second quarter numbers.
Tesco announced in late October that it had overstated profits by 263 million pounds (about $423 million), up from its previous estimate of 250 million pounds, and said the misstatements had gone on longer than previously acknowledged. Same-store sales in the United Kingdom declined 4.6% in the quarter, due to increased competition, and total sales were down by 4.4%. Tesco’s underlying profit before tax fell by 46.6%.
"The issues that have come to light over recent weeks are a matter of profound regret," Broadbent said in a statement. "We have acted quickly to clarify the financial performance of the company. A new management team is in place to address the root causes of the misstatement and to develop and implement the actions that will build the company’s future. I am confident that the new chief executive and chief financial officer will move rapidly and effectively in this respect."
David Lewis, who joined Tesco last month as chief executive officer, said the company is operating in challenging times.
"Trading conditions are tough, and our underlying profitability is under pressure," Lewis said. "We do, however, face these challenges from a position of market strength, and I have been heartened by the team’s welcome and their determination to stay focused on doing the very best for our customers."
