Tesco in dock over land clash

TESCO is facing a complete freeze of its assets in the Czech Republic in a row over property.

Britain's number one supermarket, which has 17 superstores in the republic, is appealing against an order made by a Prague district court earlier this month that barred it from selling any assets.

The dispute does not, however, have any effect on the day-today operation of the grocery giant's stores.

Tesco, which started trading in the country in 1996 with the takeover of 13 stores previously owned by the US firm K-Mart, has grown to become the fifth-biggest trading company in the Czech Republic. Tesco was also the first retailer to offer 24-hour shopping in the country, in one of its Prague stores.

The row that led to the court case can be traced back to 1998 and is linked to the sale of land to Tesco by local businessman Jiri Malik. He claims that Tesco still owes him about £5m on the deal.

The company denies this and has not yet developed the site under dispute.

In a hearing in March, Tesco successfully appealed against the confiscation of goods at one of its Prague hypermarkets.

At the latest hearing, although the judge made a decision in Malik's favour, he postponed the asset freeze on the basis that the earlier appeal was still running. Tesco said: 'We do not think this is a big deal and it will have no impact on our stores.'

Tesco chief executive Sir Terry Leahy is expected to deliver impressive first-half figures this week. Forecasts for pre-tax profits are in the range of £620-£640m, against £545m last year. Despite the problems in the Czech Republic, overseas sales are expected to have increased by 20%.