Tesco shares drop following report of new legal action over accounting botch

In September 2014, Tesco admitted that it had identified a £250m overstatement of its profits

Tesco shares lost almost half of their value in the months after the scandal broke and have struggled to recover properly since (Reuters)

Shares in Tesco fell on Wednesday following a report that the supermarket giant is facing a fresh claim for damages to one of its investors, relating to a historical accounting scandal that wiped billions off the company’s share price at the time.

Shares in the group ended the day down around 2 per cent.

Late on Tuesday, and citing court documents, the Financial Times reported that Manning & Napier, a US investment manager that has around $32bn (£25bn) in assets under management, had filed a claim against the retailer last month in London over its 2014 accounting scandal.

The paper said that the New York-based fund manager is claiming it suffered losses of $212m allegedly caused by those accounting irregularities.

In September 2014, Tesco released a statement to the stock exchange in which it admitted that it had identified a £250m overstatement of first-half profits for that year.

The UK’s supermarket watchdog later found that Tesco deliberately and repeatedly withheld money owed to suppliers to boost its sales performance artificially, in a serious breach of supermarket regulations.

Scores of investors sued the company as a result, alleging they lost millions because they bought shares on the basis of misleading accounts.

Tesco shares lost almost half of their value in the months after the scandal broke and have struggled to recover properly since.

Reuters on Wednesday reported that a spokesman for Tesco had said that the group was aware of a claim filed by Manning & Napier and would be filing a defence shortly.