Tesco bosses are cleared in major blow for fraud office
The Serious Fraud Office was facing questions over its future last night after two former Tesco executives were cleared of a £250million fraud and false accounting.
The investigator was accused of wasting millions of pounds of taxpayers’ money and criticised over its handling of the high-profile case.
It comes after former SFO boss David Green QC, who stepped down in April, was awarded a knighthood for services to the criminal justice system.
Relieved: The case against John Scouler, left, and Chris Bush has been thrown out
In September 2014, Tesco’s shares plunged 12 per cent after it admitted it had overstated profits by £250million, wiping £2billion off its market value.
Former UK managing director Chris Bush, 52, and ex-food commercial director John Scouler, 50, were accused of hiding incorrectly recorded income in a bid to meet targets and make Tesco look financially healthier than it was.
But in a major humiliation for the SFO, the charges have now been thrown out and the men acquitted.
Judge Sir John Royce dismissed the case after it was presented by the prosecution, saying it was so weak it was not fit to be considered by a jury.
The SFO is now considering whether to pursue a retrial of a third defendant, Carl Rogberg, 51, who was too unwell to stand after suffering a heart attack earlier this year.
Bush’s solicitor Ross Dixon, a partner at Hickman And Rose, said: ‘Given its status as the UK’s leading investigator of serious and complex fraud, the SFO made many basic mistakes.
‘The SFO’s failings have resulted in a four-year ordeal for Mr Bush, and the waste of millions of pounds of taxpayers’ money.’
Speaking after he was cleared, Bush said: ‘While I am delighted that my innocence has finally been established, it is troubling that Mr Scouler and I were ever charged.’
He added: ‘I am now looking forward to getting home and spending Christmas with my family.’
The acquittal of the two former Tesco directors means not a single individual has been convicted in one of the biggest corporate scandals in recent history.
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It comes at a perilous time for the SFO, which has suffered a string of failures in recent years, which include the recent dropping of charges against Barclays relating to its emergency fundraising from Qatar at the height of the financial crisis.
Sarah Wallace, a partner at law firm Irwin Mitchell, said: ‘When a high-profile case takes a dramatic nosedive it will be a blow.
‘It exposes the difficulties in trying to prosecute household names and their senior executives.
‘They need to apply more rigour and scrutiny in gathering and assessing evidence, and more realism as to which people, if any, should be in the dock.’
Theresa May had been planning to axe the organisation and absorb its duties into the National Crime Agency under manifesto plans ahead of the last election.
This proposal was ditched when she lost her majority, but the Prime Minister is thought to still have doubts about the organisation.
The SFO was founded in 1987 to investigate and prosecute serious or complex fraud and corruption. It was led by Green, a QC, from 2012 until earlier this year.
He has now taken a lucrative private sector job at law firm Slaughter And May, and was replaced by former FBI lawyer Lisa Osofsky.
Last year she spoke out in favour of May’s plans to axe the SFO.
She said the SFO had been on a knife-edge for years and argued against its heavy focus on tackling blockbuster corruption cases against firms such as Barclays and engineering firm Rolls-Royce, adding: ‘Mrs May has made a calculation here on how to spend limited resources, and get the biggest bang for her buck.’
However, in a U-turn when she got the job, she said she believed in the SFO’s independence. Osofsky said: ‘My comments about the National Crime Agency and SFO were in relation to my assessment on an announced policy at that time.
‘They did not represent my own view of the preferred future direction of the SFO.’
Last year, Tesco agreed to pay a fine of £129million to the SFO as part of a deferred prosecution agreement.
Tesco shares last night fell 2.6 per cent, or 5.25p, to 193.75p.