Blog: Tesco profits plunge, chairman departs

Katy Askew | 24 October 2014

Tesco has reported a massive 92% drop in first half profits as the accounting fiasco continues to widen.

A probe into Tesco's accounting practices has uncovered an accounting black hole that has resulted in a GBP263m profit overstatement.

Former CEO Philip Clarke resigned this summer, before the accounting issues became public. His successor, former Unilever executive Dave Lewis is now faced with the somewhat daunting task of cleaning up the mess.

Lewis has started a strategic review and until this is complete it is unlikely we will see any major strategy shake-up from the UK's largest retailer.

However, what we can expect is for heads to roll.

Eight senior executives have been suspended pending the outcome of the inquiry, which is probing how Tesco logged suppliers' rebates and if they were reported in the correct accounting period.

And - predictably perhaps - alongside the dire profit news delivered to the market this morning was Tesco chairman Sir Richard Broadbent, who confirmed plans to quit.