LONDON, March 24, 2015 /PRNewswire/ --
Tesco Shareholder Claims Limited ("TSC"), a not for profit group, today announced it will seek to bring an action against Tesco PLC ("Tesco") on behalf of institutional shareholders as a result of Tesco's announcement on 22 September 2014 that it materially overstated its profits. This overstatement caused a permanent destruction of value to shareholders and the Group will seek to bring a claim under section 90A of the Financial Services and Markets Act 2000.
TSC is fully funded and is supported by Scott + Scott LLP, a leading US litigation firm which has already brought a similar action against Tesco in the US. The Group in the UK will be represented by McGuire Woods LLP and is open to any institutional shareholder which bought shares in Tesco prior to the announcement on 22 September 2014 and one month following. On 22 September 2014 Tesco announced that it had overstated its expected profit for the half year by £263 million, prompting a sharp decline in the value of the company and driving the share price down to a 14 year low of 164.8p. TSC argues that whilst it supports the turnaround strategy being undertaken by the new management team, a permanent destruction of value has occurred and had the accounting irregularities not taken place the share price, and value of the company, would today be materially higher. TSC expects the claim to be in the region of 50p-70p per share. Tesco Plc has in excess of 8 billion shares listed.
TSC is now in active discussion with leading institutions in the UK, Europe and the US about joining the claim on a no win no fee basis. TSC will secure appropriate adverse cost coverage to ensure that should the claim not succeed its members will not need to pay costs. In the US the claim against Tesco has already seen several leading institutions file claims. David Scott, Managing Partner at Scott + Scott said, "International institutions asked us to find a way to bring a claim in the UK which they can join. I am delighted to be part of this action which, given the strength of the case, is already attracting a lot of interest from shareholders in the UK and Europe. "
Commenting on the action John Bradley, Chairman of the Group, said: "Tesco is one of the widest held stocks in the UK and this loss has hit pension funds and investors across the UK and beyond. We look forward to bringing this claim to court."
SOURCE Tesco Shareholder Claims Limited