The chairman of Britain's largest supermarket chain says he plans to resign amid an investigation over an accounting error that resulted in a massive profits overstatement.
Tesco chairman Sir Richard Broadbent said he will leave his post after an audit revealed profits for the first half the year were overstated by £263 million — roughly $422 million. And as a result, profits took a 92 percent nosedive.
In a statement, Broadbent expressed "profound regret" and says "a new management team is in place to address the root causes of the mis-statement."
Eight top executives for the multinational grocery giant have been suspended as a result of the accounting blunder. The company didn't go into details on why or how long they'd be sidelined. (Video via ITV, Tesco)
Tesco's new chairman, Dave Lewis, said the accounting error came from a mix-up "with suppliers being booked when they were agreed instead of when the cash was actually paid."
Regardless, an ITV economics reporter says the international retailer — which is basically Britain's version of Wal-Mart — has an uphill battle to climb to restore customer confidence.
And a BBC analyst says the company may continue to fall on hard times moving into the new year.
BBC: "I think things will get worse before they get better. It has to get through Christmas. And Christmas was sort of planned back in the start of the year, so there's very little room for Tesco to maneuver at the moment."
This video includes images from Getty Images and Tesco PLC / CC BY NC SA 2.0.
