Tesco opens £85m compensation scheme, paying retail investors more than three times more interest than City institutions

Oliver Gill
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A mammoth accounting black hole was identified in Tesco's 2014 accounts (Source: Getty)

Tesco will today open a compensation scheme for around 10,000 investors misled by a 2014 trading statement.

Regulators estimate the scheme will cost the supermarket giant around £85m.

The scheme, announced in March, will provide redress to share and bondholders that bought into the firm between 29 August and 19 September 2014.

Compensation will be 24.5p per share plus interest. Retail investors will be paid over three times the rate of interest compared with institutional investors in the programme to be administered by accountants KPMG.

Read more: Tesco hands payouts to 10,000 shareholders over its 2014 accounting scandal

The Financial Conduct Authority (FCA) will oversee the process.

Institutions affected will receive interest at a rate of 1.25 per cent per annum, whereas retail investors' interest will be charged at four per cent per annum.

A number of UK regulators have investigated Tesco and its accountants after a £263m black hole was identified in the firm's financial statements in 2014.

Alongside compensation, the Financial Conduct Authority and Serious Fraud Office slapped the supermarket with a £129m fine.

The Serious Fraud Office has charged three former Tesco employees. Accounting regulators have dropped a case against auditor PwC but are continuing their investigations into employees' actions.

Read more: Tesco urges watchdog to fast-track investigation into Booker merger

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