Hard times for Tesco shareholders
Tesco shareholders have suffered in recent times for a variety of reasons. The supermarket lost over a £1 billion last year when it shut down Fresh & Easy – its effort to expand into America. Since then, company shares have also halved in value, due to the scandal in June that Tesco profits had been exaggerated by £260 million – after which followed a restatement, with the involved mangers being suspended. Since the revelation, three are said to have left the company completely, while the Serious Fraud Office looks into the case. Even last week, various shareholders threatened to sue the supermarket. Despite the fact that – financially – the £260 million overstatement pales in comparison to the Fresh & Pay loss, the dishonesty and profit restating hit Tesco's reputation hard.
The chain essentially fed shareholders and potential shareholders fraudulent information, misleading them. It can therefore be sued for compensation via one lawsuit as opposed to individual action.