Tesco Agrees to Settle U.S. Class-Action Suit for $12 Millionby
Tesco Plc has agreed to settle a U.S. class-action lawsuit brought by shareholders against the company related to last year’s accounting scandal.
Under the agreement, Tesco will pay $12 million but make no admission of liability, the company said in a statement Thursday. The settlement with holders of the company’s American depositary receipts is subject to confirmation by a federal court in New York.
For Tesco, the agreement ties up another loose end from a scandal which saw it place nine senior managers on leave, overhaul its executive pay structure and become the subject of a criminal investigation in the U.K. An independent review found that through recognizing income before it was received and deferring payments owed to suppliers, the company overstated its profits by 326 million pounds ($492.8 million)
The settlement agreement resolves one of two U.S. claims brought against the company. The other lawsuit was brought in Ohio by the remaining holders of the ADRs, representing less than 0.2 percent of Tesco’s shares.