Tesco bosses in accounting scandal ignored staff who feared jail, court hears

A whistleblower at the heart of the Tesco accounting scandal in the UK has described the determination of senior managers to meet budget targets with them ignoring concerns raised by staff who feared they would end up in jail.

Carl Rogberg, 50, Chris Bush, 51, and John Scouler, 49, are accused of failing to correct inaccurately recorded income figures which were published to auditors, other employees and the wider market.

A shock announcement published in September 2014 revealed that the firm had overestimated its profits by £250m.

Amit Soni, who joined the UK arm of the supermarket giant as a senior accountant in June 2013, told Southwark Crown Court that despite being told it would be impossible to recover shortfalls in the budget, members of senior management were keen to "cover the gap".

Mr Soni said that, at the time he joined the company, increasing pressure from rival chains and repeated poor performance against targets had created substantial pressure for workers.

He said: "It was more felt that there was (pressure).

John Scouler.

"And it came from constant reviews, innumerable conversations on how Tesco had to do better - the performance versus the budget every month.

"And as the gap widened there was a sense that there was a lot of hard work that was going on internally but it was not showing anywhere in the results."

Jurors heard that during June 2014 meetings with commercial directors in which they discussed them missing the budget by tens of millions of pounds, Bush repeatedly told them to "get back to zero".

Referring to one meeting, Mr Soni said: "They were obviously saying there is going to be a £72 million gap or projected gap to budget and that they were working hard to close the gap, but they didn't think the gap could be closed which is why £72 million was the estimate at that stage.

"What the commercial directors were saying in that meeting was that after considering all the options possible that there was going to be a projected gap of £72 million.

"But Chris (Bush), as in previous meetings, in that meeting said everybody had to work towards getting the gap to budget back to zero."

Amit Soni.

Sasha Wass QC, prosecuting, asked Mr Soni about a series of meetings Bush had with the four commercial directors in August referring to a June 17 document that showed a mis-statement of £240 million.

One of these meetings was with George Wright. Asked what Mr Wright's morale was like, Mr Soni replied: "The morale was quite low and they were quite tense - all four of them.

"George Wright was quite concerned before and after the meeting. He was quite tense."

Jurors have heard how Tesco would use the practice of pulling forward income from the future to artificially inflate the figures of the present, something that was not always in keeping with proper accounting standards and principles.

Mr Soni explained that Mr Wright was worried that conversations with suppliers had gone on too long in a way that income was being pulled forward and accruals being booked.

He added: "In the meeting he said 'I don't want to go to jail for this'."

Mr Soni also told the court that the figure of £240 million was mentioned in the meetings and that Bush took the view that it was legacy now and would be addressed with the new chief executive.

Rogberg, of Chiselhampton, Oxfordshire, Bush, of High Wycombe, Buckinghamshire, and Scouler, of St Albans, Hertfordshire, all deny the charges.

The trial continues at 10.30am on Thursday.

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