UK law firm calls on Tesco shareholders to join lawsuit
By Kirstin Ridley
LONDON, Nov 25 (Reuters) - A London law firm is rallying Tesco Plc shareholders to join a lawsuit and seek compensation for losses after Britain's largest retailer discovered a hole in its profits, suspended eight senior employees and sparked a series of investigations.
The Serious Fraud Office became the latest agency to wade into the scandal last month, launching a criminal investigation into accounting practices after Tesco admitted it had overstated half year profits by 263 million pounds ($412 million) and called in forensic accountants and lawyers.
Stewarts Law, one of the litigators behind a 4 billion pound ($6.26 billion) investor case against Royal Bank of Scotland , said its claim will allege that directors and senior managers knew or were reckless as to whether Tesco's statements to the market were untrue or misleading.
Tesco declined to comment.
Sean Upson, a partner at Stewarts Law, said he was in contact with investor intermediaries and would file the case in London's High Court within six months if it has enough support.
The claim will be financed by litigation funding firm Bentham Ventures, one of a handful of companies that take on the risks of court battles in return for a percentage of any payout.
All current and former shareholders who bought at least 10,000 shares between April 17 2013 and Oct. 22 2014 and who have not sold all their stock ahead of Tesco announcements in August, September and October are eligible.
Tesco, which has seen its market value halve after the accounting errors compounded a succession of profit warnings, is already facing a proposed investor lawsuit in the United States.
The grocer, which is battling to fend off German discounters Aldi and Lidl in an increasingly competitive market, said in September it had identified accounting irregularities caused by booking deals with suppliers too early -- and costs too late.
Chairman Sir Richard Broadbent has said he will step down next year, while bonus payments to former chief executive Phil Clarke and former finance director Laurie Mcllwee are being withheld pending the outcome of investigations.
(1 US dollar = 0.6378 British pound) (1 US dollar = 0.6385 British pound) (Reporting by Kirstin Ridley, editing by Louise Heavens)
