Tesco begins £85m payout over scandal

Tesco is expected to pay out an average of £400 to more than 10,000 shareholders as it attempts to clean up the wreckage of its devastating accounting scandal.

The supermarket is paying out £85 million to investors and bondholders after it forecast profits of £1.1 billion for 2014, based on false figures provided by its Tesco Stores arm.

The retailer said later it had overstated its potential profits, uncovering a £263 million black hole because it had booked payments from suppliers early.

The accounting scandal led to the departure of key staff, a Serious Fraud Office investigation and contributed to a £6.3 billion loss in 2015.

Shareholders who bought Tesco shares or bonds between August 29 and September 19, 2014 are entitled to the compensation, worth 24.5p per share plus interest. Investors who only held Tesco shares during this period will not be able to claim.

KPMG will handle the scheme and investors have six months to claim.

Tesco reached a deferred prosecution agreement with the SFO and will avoid prosecution for false accounting as long as it compensates shareholders.