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Tesco probe launched

October 1, 2014

Britain's financial watchdog has launched an investigation into an accounting scandal at the retail giant. Last month, Tesco admitted to vastly overstating first-half profit.

Tesco Supermarkt Geschäft Handelskette
Image: AFP/Getty Images

Tesco, the UK's biggest grocer and one of the biggest retailers worldwide, is to be investigated by the UK's Financial Conduct Authority (FCA).

"The Financial Conduct Authority has notified Tesco that it has commenced a full investigation following the overstatement of expected profit for the half year," the FCA said in a statement released to the London Stock Exchange. Tesco said it would "cooperate fully with the FCA."

On September 22, Tesco admitted to overstating its first-half profits by 250 million pounds ($405 million, 321 million euros). It was effectively its third profit warning in two months.

Tesco suspended four senior executives and launched its own investigation. The shock announcement comes on top of dismal data showing that the once dominant retailer in the UK has seen its market share fall to 28.8 percent from 30.2 percent within a year, making it the worst performer among the "big four" grocers Asda, Tesco, Sainsbury's and Waitrose.

The FCA's announcement comes after UK lawmakers hinted they may want to grill Tesco executives on the accounting scandal, according to the chairman of the British parliament's Business Select Committee.

ng/uhe (Reuters, AFP)