Tesco continues to fall under the media glare in Tuesday’s papers as it agreed to pay a whopping fine to avoid prosecution in the fraud case and as two institutional shareholders revolted over the Booker deal.
Tesco’s UK arm is set to pay a £129m penalty to avoid prosecution for a 2014 accounting scandal, while handing millions more to investors who bought shares in the weeks after the flawed numbers were published, The Financial Times reports. The Lex column in The Financial Times writes in a piece headlined “Tesco: discounted justice” that the “punishment points to a trend to levy penalties because it is easy rather than right”.
Tesco CEO Dave Lewis said the settlement allowed the company to move on, but admitted the Tesco brand had been damaged by the disclosure of the accounting scandal (The Guardian). The deal means Tesco will escape prosecution for the £263m black hole it discovered in its accounts in 2014, which later grew to £326m, The Telegraph adds. At the time, the retailer admitted it had been booking income from suppliers early.
The Mail’s story is headlined “Why has Tesco been forced to compensate shareholders and what will they get?” as details emerge that the compensation scheme will be administered by KPMG and open by 31 August.
Nils Pratley writes in The Guardianthat Tesco has settled with the SFO, but faces more headaches ahead. The editorial says the supermarket can move on after the accounting scandal, although restless shareholders could spell trouble. “There’s no more trouble in store, says Tesco boss”, writes The Times in its headline. The paper also looks at ‘Dave’s drastic measures to stop a scandal’ as it examines what Lewis has done in the past two-and-a-half years since joining Tesco. Alistair Osborne adds in his Times editorial column that “Every little hurts, in accounts farrago”. “That’s how to deal with revolting shareholders: bribe them into submission. No sooner do Schroders and Artisan Partners start kicking off about Tesco’s “value destroying” £3.7 billion takeover of Booker than look what happens: up pops Dave Lewis with an £85 million bung.”
Tesco boss Dave Lewis defended the Booker merger, saying he had taken soundings from many supportive shareholders and insisted Tesco remains “absolutely, completely committed to the deal” (The Express). The Telegraph argues in a business editorial that Tesco should take heed of criticism over Booker deal.
Weetabix looks likely to be gobbled up by the American cereal giant Post Holdings in a £1bn-plus deal that could be announced as soon as this week, The Telegraph reports. It follows a story in The Grocer at the start of March that Post was leading race as former bidders ended their interest.
Today’s front pages are dominated by photos of PM Theresa May signing article 50 and beginning the process of the UK leaving the EU. The Guardian has a story reporting that Brexit will increase cost of imported fruit and vegetables by up to 8% no matter what trade deal is struck, according to City analysts.
AG Barr annual results gets short shrift thanks to Tesco, but The Telegraph writes that CEO Roger White admitted he expected prices of Irn-Bru and other brands to rise this year to cover the costs associated with a weaker pound.
More negative press for craft brewer BrewDog. The Guardian reports that the businss threatened legal action to prevent a bar from using the term “punk” in its name. The news emerged a day after the brewer blamed “trigger-happy” lawyers for a similar dispute that sparked a social media backlash.
The Telegraph has a column looking at how Unilever’s long-term focus creates resonating value.
Cargill chief warns against protectionist policies, writes The Financial Times. The head of the US’s largest privately owned group points to risk of a trade war with China.
Huishan Dairy confirms it missed interest payments as the Chinese group says it cannot reach the executive in charge of relationship with bankers (The Financial Times).
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