The world’s second largest retailer, Tesco plc, rushes in Alan Stewart as the new Chief Financial Officer, one day after suspending four executives, including UK Managing Director, Chris Bush. Mr. Stewart, who had the same post in Marks and Spencer, comes in two months earlier than planned.
Update October 1st, 2014: Tesco’s accounting practices are to be investigated by the Financial Conduct Authority.
Food sourcing chief, Matt Simister, UK finance director, Carl Rogberg, and food commercial director, John Scouler, are also believed to have been suspended.
Mr. Stewart takes over from Laurie McIlwee, who had resigned in April 2013 and left the company last week.
On Monday, Tesco plc shocked investors by announcing that it had inflated its half-year profit guidance by £250 million ($409 million).
The London-based supermarket chain has brought in accountants Deloitte and legal advisers Freshfields to carry out a comprehensive investigation into its accounting system.
Alan Stewart is parachuted in from Marks and Spencer.
To inflate guidance figures by so much is unprecedented in a company of Tesco’s size. The scandal triggered a -11.6% and -3.7% decline in share price on Monday and Tuesday respectively. On Tuesday morning, Tesco’s shares were trading at 195.55p.
Tesco negotiated with Marks & Spencer and managed to bring in Mr. Stewart ahead of his planned December 1st move.
According to several British media sources, Tesco CEO, Dave Lewis, approached his Marks & Spencer counterpart, Marc Bolland, directly.
Jonathan Lloyd, Tesco Company Secretary, wrote in a statement on Tuesday:
“Pursuant to Listing Rule 9.6.11, and further to Tesco PLC’s announcement on 28 July 2014, the Company announces that Alan Stewart will join the Board as Chief Financial Officer with effect from 23 September 2014, rather than the previously announced date of 1 December 2014.”
Mr. Stewart’s arrival will help calm investors, who have had a difficult twelve months, culminating in a full-blown crisis this week.