Full Marks To Tesco For Its Detailed Product Description

...that’s very specific 😳 pic.twitter.com/kwoCx2Tu51

— John Donoghue (@JohnDonoghue64) March 7, 2018

20,000 Tesco Bank Customers Lose Money

Tesco Bank has halted online payments for current account customers after money was taken from 20,000 accounts.

The bank's chief executive Benny Higgins told the BBC he was "very hopeful" customers would be refunded within 24 hours.

About 40,000 accounts saw suspicious transactions over the weekend, of which half had money taken, he said.

Customers will still be able to use their cards for cash withdrawals, chip and pin payments, and bill payments.

They can also use online banking, but cannot make online transactions until the situation is back under control.

Earlier, the bank confirmed some accounts "have been subject to online criminal activity, in some cases resulting in money being withdrawn fraudulently".

Mr Higgins also apologised for the "worry and inconvenience" that customers have faced.

It is not clear as to the true scale or cause of this issue. However, it does rather call into the question the security of banking online and the desire by some in banking and politics to rush us towards a cashless society!

Other Companies Sucked Into Tesco Black Hole

The fallout from Tesco's £263M continues unabated, as some of the world’s largest consumer goods companies have woken up to the fact that it may impact their results and integrity. As such, companies such as Unilever, Proctor & Gamble and Coca-Cola have brought in auditors to check their UK operations.

The Telegraph notes that a source close to the probe said that Tesco had booked supplier contributions that were conditional on hitting sales targets that it was not going to reach.

They claimed that a “small group” of employees, realising these sales targets would not be hit, struck deals with suppliers to still make these payments by offering benefits in the next financial period. These benefits were then kept secret.

That would count as fraud both within Tesco and the supplier that agreed to the arrangement.

Private Jet For Sale - One Extravagent Owner

Tesco has begun to sell off its fleet of luxury private jets. First on the market is its 14 seat Gulfstream G550, purchased in 2008.

Yours for £22M.

I dare say Aldi will do one cheaper though!

Tesco Reports 92% Profit Collapse

The omnishambles of Tesco's profit forecast overstatement has at last claimed the head of the chairman (Sir Richard Broadbent). He will stand down as Tesco today has reported 92% fall in pre-tax profits.

In fact the £250M black hole was £263M!

Sir Richard will stand down once new chief executive Dave Lewis has established his strategy for the company, which is likely to be next year.

Tesco Suspends Three More Directors

The fallout from the £250M profit forecast overstatement continues, as Tesco has suspended three more senior employees.

Tesco is quoted in The Guardian:

“We have asked three employees to step aside to facilitate the investigation into the potential overstatement of profits in UK food for the first half of the year.” 

Although the staff are not named, they are understood to be category directors in charge of procuring whole sections of goods for Tesco stores. As per Sky News they are Dan Jago, Tesco’s UK and group wine director, Sean McCurley, director of convenience foods, and William Linnane, director of impulse purchases.

Their Twitter and LinkedIn accounts were deactivated on Tuesday.

Earlier this week Tesco’s company secretary, Jonathan Lloyd, said he would leave next March after serving his notice period. Audit committee chairman and non-executive director Ken Hanna is also expected to stand down when his six-year term ends later this year.

This is certainly one way to revamp the board. However, whilst these staff are suspended one might be forgiven for asking who exactly is/are covering their roles?

Tesco Chairman Considers Resigning

The Wall Street Journal reports that Tesco Chairman Richard Broadbent, in the light of the profit and corporate jet debacle, is considering resigning after the investigation into company's accounting practices is complete.

Should that action not take place before the investigation is complete?

Tesco Doesn't Give a Flying Fuck

Kudos to the board of Tesco for buying a $50M corporate jet.

I trust and assume the long suffering shareholders with have a few words to say about this!

FCA To Investigate Tesco

Unsurprisingly Tesco is to be investigated by the Financial Conduct Authority (FCA) over the £250M profit shortfall in its accounts.

Additionally, the Serious Fraud Office has said it is also prepared to intervene if necessary.

Tesco is quoted by the Telegraph:

"Tesco will continue to co-operate fully with the FCA and other relevant authorities considering this matter."

Tesco Whistleblower Ignored For Months

According to the International Business Times, the Tesco whistleblower who alerted senior executives to the £250M shortfall in profits was allegedly ignored for months.

Seemingly the whistleblower alerted senior directors at Tesco in July of concerns but "failed to get traction".

The Tesco Clusterfuck

On Tuesday I asked:

"Given that the auditors warned about this in May, does this mean that the previous year's profits were overstated?"

It seems that I am not the only one who thinks this. The Telegraph reports that the Financial Reporting Council is “monitoring the situation” and could force Tesco to restate past accounts.

To rub salt into the wounds, it seems that Tesco have been "winging it" without a Finance Director since April; as its outgoing finance director Laurie McIlwee had “has not been involved or had any input to any financial matters” since he resigned on April 4.

This appears to be but the tip of a very large iceberg.

The Tesco Clusterfuck Live

Tweets about "tesco"

Tesco Warned By PwC

The Telegraph reports that PwC, Tesco’s auditor, warned in the company’s annual report in May that it was concerned about how income from commercial deals with suppliers was recognised. It listed the issue as its primary area of focus “because of the judgement required in accounting for the commercial income deals and the risk of manipulation of these balances”.

In response, Ken Hanna, chairman of Tesco’s audit committee, wrote:

“The committee notes that commercial income was an area of focus for the external auditors based on their assessment of gross risks. It is the committee’s view that while commercial income is a significant income for the group and involves an element of judgement, management operates an appropriate control environment which minimises risks in this area. As a result, the committee does not consider that this is a significant issue for disclosure in its report.”

Given that the auditors warned about this in May, does this mean that the previous year's profits were overstated?

Tesco Overstates Profit Forecast By £250M

Tesco has stated that it overstated a six month profit forecast by £250M.

It has appointed Deloitte to independently investigate the issue.

Dave Lewis, CEO, is quoted by the BBC:

"We have uncovered a serious issue and responded accordingly."

Tesco said the overstatement was "principally due to the accelerated recognition of commercial income and delayed accrual of costs". It also said some of the error was due to "in-year timing differences".

Unsurprisingly the markets are unimpressed, and shares in Tesco nosedived by 10% this morning.