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Former Tesco director is acquitted over £250m fraud scandal


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Tesco’s former UK finance director has been cleared over a £250 million fraud and false accounting scandal after the scandal-hit Serious Fraud Office (SFO) dropped the case against him.

Carl Rogberg, 52, was accused of knowing that income was being wrongly included in records to meet targets and make the company look financially healthier than it was.

His trial was abandoned last year after he suffered a heart attack and he was too ill to face a retrial alongside ex-managing director Chris Bush, 53, and John Scouler, 50, the former UK food commercial director. 

Rogberg’s acquittal means the SFO has failed to secure any prosecutions despite Tesco having admitted to overstating its profits in September 2014. Its probe is now closed and no further charges will be brought, MailOnline understands. 

Carl Rogberg (centre, with his partner Amanda Rogberg on the right) arrives at Southwark Crown Court for a hearing today 

Bush and Scouler were cleared of one count of fraud and another of false accounting last month after a judge at Southwark Crown Court dismissed the case because it was too ‘weak’.

Rogberg appeared at the same court today, where not guilty verdicts were formally entered on the same two charges after the SFO announced it would offer no evidence against him.

He said today: ‘It is a huge relief that this day has finally come. While I always had faith that it would, the journey here has not been an easy one. 

‘The trial has had enormous consequences on my health and exemplary career, as well as for my wife, my son, my family and my friends. 

How Tesco BLAMED the three directors before they were cleared of all charges against them 

Tesco blamed three directors who have since been cleared of all charges for the false accounting scandal in a document which can be reported for the first time after restrictions automatically elapsed at the end of the criminal trial.

The claims are made in a ‘statement of facts’ prepared as part of the company’s deferred prosecution agreement (DPA) with the Serious Fraud Office.

It says: ‘Members of TSL’s (Tesco Stores Limited) senior leadership team who were aware of and dishonestly perpetuated the misstatement leading up to the trading update on August 29, 2014 and up until the correction on September 22, 2014, thereby falsifying or concurring in the falsification of accounts or records made for an accounting purpose, were a. UK financial director Carl Rogberg; b.UK managing director Chris Bush; and c. UK food commercial director John Scouler.’

The document also states that ‘certain employees at various levels of seniority in TSL’s finance and commercial teams’, acting under the guidance of the three directors, ‘were aware of improper recognition of commercial income’.

‘This decision is so much more than simply an acquittal. The trial judge ruled that the prosecution had no case and stopped the trial.’ 

Tesco’s shares plummeted by nearly 12%, wiping £2 billion off the share value, when the company announced in September 2014 that a statement the previous month had overstated profits by about a quarter of a billion pounds.

Rogberg’s acquittal means neither Tesco nor any of its executives have been successfully prosecuted over one of the biggest corporate scandals in recent history.

Acting for Mr Rogberg, Neil O’May of Norton Rose Fulbright said: ‘This is more than simply an acquittal by a jury. It is a finding that there was insufficient evidence on which the case could have been brought. This is unprecedented in high-profile serious fraud cases.

‘There must be real concern that a serious fraud case is brought without the SFO having expert accounting evidence in which to understand the nature of the case.

‘There was also no real investigation undertaken to show whether or not there was indeed fraudulent activity as alleged at the level of buyers and suppliers.’

Details of a deferred prosecution agreement (DPA) between Tesco and the SFO can now be reported after restrictions lapsed automatically following the end of the criminal proceedings.

As part of the agreement, which is expected to be published by the SFO on Wednesday, Tesco agreed to pay a fine of £129 million but avoided a trial.

Cleared earlier: Former Tesco UK managing director Chris Bush (left) leaves Southwark Crown Court on December 6 after being cleared of fraud charges 

Cleared earlier: Former Tesco UK managing director Chris Bush (left) leaves Southwark Crown Court on December 6 after being cleared of fraud charges 

Cleared earlier: John Scouler, 50, (pictured on December 6) also faced similar charges but was cleared 

Cleared earlier: John Scouler, 50, (pictured on December 6) also faced similar charges but was cleared 

Carl Rogberg’s full statement after being acquitted  

It is a huge relief that this day has finally come. While I always had faith that it would, the journey here has not been an easy one. The trial has had enormous consequences on my health and exemplary career, as well as for my wife, my son, my family and my friends.

This decision is so much more than simply an acquittal. The trial judge ruled that the prosecution had no case and stopped the trial. The SFO tried to appeal that decision. Three appeal court judges refused permission for the SFO to appeal and confirmed the trial judge’s decision. In short, there was never any evidence of my wrongdoing and I should never have been charged.

I have serious questions for Tesco and the SFO about the way this case has been handled throughout.

Mr Rogberg makes a statement, as he speaks next to his partner Amanda, outside Southwark Crown Court today 

Mr Rogberg makes a statement, as he speaks next to his partner Amanda, outside Southwark Crown Court today 

The circumstances were never properly investigated by Tesco from the outset. They rushed to the wrong judgment and then entered into a Deferred Prosecution Agreement with the SFO on a completely false basis. Truth and justice were abandoned for their commercial imperatives. Tesco needlessly paid over £129m in fines, not to mention the value that was lost in the company as a result of this fiasco. Their drastic action has been extremely damaging for Tesco’s employees, shareholders and pension funds.

For their part, the SFO uncritically adopted Tesco’s approach. They failed to carry out a professional investigation and made fundamental errors. They refused to see the truth, preferring instead to drive on blindly with the prosecution. Indeed, they pressed the case through two long trials and even mounted a hopeless appeal against the judge’s decision to stop the case. This was all a dreadful waste of tax payers’ money.

The Deferred Prosecution Agreement, also published today, has been proven to be a fundamentally flawed document. A High Court Judge, who actually heard the evidence, supported by Three Appeal Court Judges, found no evidence of guilt on behalf of those named in it. It is a worthless and dishonest piece of paper with no credibility. And yet it is still vigorously defended by Tesco and the SFO who stand alone in refusing to accept the truth – even to the extent that Tesco threatened me with costs for daring to challenge what was proven in court to be false.

As I have always said, I acted honestly at all times. I am relieved and happy to be standing here with my name cleared of all the false allegations that have been made against me. I would like to say a huge thank you to my family, to our many amazing friends for their phenomenal support and to my fantastically dedicated legal team of Nick Purnell QC, Jonathan Barnard of counsel and Neil O’May at Norton Rose Fulbright for working tirelessly to reveal the truth.

Thank you and I will not be taking questions at the moment.

Timeline: How the scandal unfolded  

September 2014: Tesco admits issues in UK food business means it is likely to have overstated profits by £250million

April 2015: Tesco reports a £6.4billion loss, one of largest in corporate history

September 2016: Christopher Bush, 52, managing director of Tesco UK, and John Scouler, 50, UK food commercial director, are charged with one count of fraud by abuse of position and one count of false accounting. This was after they were accused of being aware of income being wrongly included in Tesco’s financial records to meet targets and make it look financially healthier than it was.

March 2017: Tesco reaches agreement with authorities over scandal as it pays investors £85million in compensation and £129million in fines and costs

February 2018: First trial is abandoned, shortly before the jury is due to retire to consider its verdict

October 8: Fresh trial begins and is expected to last three months. Jury told case was a retrial and that Rogberg was charged with identical offences but was not currently well enough to stand trial.

November 25: Trial judge Sir John Royce concludes there is no case against either Bush or Scouler

December 5: SFO goes to the Court of Appeal regarding the trial’s dismissal, but its appeal is then dismissed

December 6: Jury at Southwark Crown Court are told of the Bush and Scouler’s acquittal

January 1: Rogberg is acquitted as SFO says it has no evidence against him.  

Lawyers for the acquitted defendants had argued it was unfair to publish the ‘statement of facts’ contained in the agreement, which ‘ascribes wrongdoing to them’, according to a High Court ruling made last week by Sir Brian Leveson.

Speaking after the end of the criminal case, Bush’s solicitor Ross Dixon, of Hickman & Rose, said the case ‘sounds an alarm call’ for the criminal justice system with ‘contradictory outcomes’ between the criminal trial and the DPA.

‘The trial of my client Chris Bush and of John Scouler exposed the SFO’s failure to investigate with proper rigour the case against these men,’ he said.

‘As a consequence, they were rightly acquitted by a judge who concluded that the case against them was too weak to put to a jury.

‘Today the SFO correctly offered no evidence against the third defendant Carl Rogberg.

‘But despite being acquitted of all wrongdoing – and as a direct result of the DPA – the SFO now publishes a statement that in effect contradicts these not guilty verdicts.’ 

‘This is an unfair and extraordinary outcome and one that calls for urgent reform of the DPA process.’

Mr O’May echoed the sentiment, adding that the DPA ‘has been shown to be false’ and is ‘deeply prejudicial and distressing’ to his client Mr Rogberg.

‘Mr Rogberg feels the law has let him down. He believes the DPA was agreed for commercial purposes and throws justice and the truth to the wind, and him with it,’ he said.

Scouler, of St Albans, Bush, of High Wycombe, and Rogberg, of Chiselhampton, Oxfordshire, all denied one count of fraud and another of false accounting.

Tesco said it would not comment on cases against individuals.  

How scandal saw £2billion wiped off value of Britain’s biggest retailer 

News of Tesco’s accounting scandal sent shockwaves through the City in 2014 and raised serious questions over how a FTSE 100 firm could get away with ‘cooking the books’.

The grocery giant issued a series of profit warnings in the run up to the September announcement about overstated profits, as the group reeled under the disastrous reign of chief executive Philip Clarke.

Mr Clarke, who left the retailer just before the scandal, presided over a tumultuous period for Britain’s biggest retailer, in which market share slumped as Tesco came under pressure from discount rivals Aldi and Lidl.

Tesco issued a series of profit warnings in the run up to the announcement about overstated profits

Tesco issued a series of profit warnings in the run up to the announcement about overstated profits

The bombshell disclosure came on September 22, when the company admitted that issues uncovered in its UK food business meant it was likely to have overstated profits by £250 million.

The disclosures wiped £2 billion off the supermarket’s share price in one day, and the overstatement was later revised up to £326 million.

Tesco ordered an immediate review into the errors, undertaken by Deloitte and law firm Freshfields, but the damage had already been done.

Tesco suspended eight directors and the Serious Fraud Office (SFO) charged three former executives – Carl Rogberg, Chris Bush and John Scouler – with fraud after the black hole was discovered.

Tesco chief executive Dave Lewis has tried to move the group on from the scandal

Tesco chief executive Dave Lewis has tried to move the group on from the scandal

To compound matters, the scandal contributed to Tesco’s £6.4 billion loss in 2015, one of the largest in corporate history.

In 2017, Tesco reached an agreement with authorities over the scandal that saw it pay £85 million in compensation payouts to investors and £129 million in fines and costs.

The Deferred Prosecution Agreement (DPA) with the SFO saw the company escape prosecution but book a total hit of £235 million.

The agreement came as Britain’s financial watchdog, the Financial Conduct Authority, concluded that Tesco had committed market abuse.

Although Mr Clarke was spared charges linked to the scandal, Rogberg, Bush and Scouler – the former finance chief, managing director and food commercial head – faced a lengthy court case that eventually began in 2017.

They stood accused of being involved in a ‘white-collar crime’ plot and were charged with fraud by abuse of position and false accounting.

After the initial trial collapsed, a retrial date was set for October last year.

The jury was told the case was a retrial and that Rogberg was charged with identical offences but was not currently well enough to stand trial. 

News of Tesco's accounting scandal sent shockwaves through the City in 2014 

News of Tesco’s accounting scandal sent shockwaves through the City in 2014 

Rogberg appeared at the same court today, where not guilty verdicts were formally entered on the same two charges after the SFO announced it would offer no evidence against him.

He said today: ‘It is a huge relief that this day has finally come. While I always had faith that it would, the journey here has not been an easy one. 

‘The trial has had enormous consequences on my health and exemplary career, as well as for my wife, my son, my family and my friends. 

‘This decision is so much more than simply an acquittal. The trial judge ruled that the prosecution had no case and stopped the trial.’ 

Read more at DailyMail.co.uk


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