New legal action for Tesco which could cost them billions
Tesco can't catch a break these days, with their £236m profit mis-statement coming back to bit them on their buttocks all over again. The retailer is looking at more legal action, which is potentially worth billions of pounds.
So what's happening? Well, there's a group called Tesco Shareholder Claims Ltd (TSC) who are backed by the American legal firm, Scott & Scott, and they're wanting compensation under a co-ordinated action after the drastic drop in Tesco's share price at the end of last year.
A statement from the group said: "A permanent destruction of value has occurred and had the accounting irregularities not taken place the share price, and value of the company, would today be materially higher. TSC expects the claim to be in the region of 50p-70p per share."
"Tesco Plc has in excess of eight billion shares listed."
To add to Tesco's woes, another firm - Stewart's Law - are also preparing a similar case. If they all manage to claim compensation for the various shareholders, this is going to be catastrophically expensive for the supermarket giant. Chairman of the claims group, John Bradley, said: "Tesco is one of the widest held stocks in the UK and this loss has hit pension funds and investors across the UK and beyond. We look forward to bringing this claim to court."
And while the supermarket is showing some signs of recovery, the fact is, they're not likely to salvage their reputation any time soon. It'll be years before traders trust the company again. In addition to this, Tesco are in the middle of a massive redundancy programme, as they lose staff in a bid to save millions of pounds per year.
With the Serious Fraud Office still sniffing around them, launching a formal criminal investigation, Tesco's woes aren't over by a long chalk.