The Serious Fraud Office’s (SFO) use of deferred prosecution agreements (DPAs) has come under fire following the acquittal of the last of three former Tesco directors accused of financial misreporting over the £236m accounting scandal.
Carl Rogberg, the former UK head of finance at the supermarket chain, was found not guilty by Southwark Crown Court this week. In November, two other directors were found to have no case to answer.
Tesco admitted wrongdoing in the scandal in order to secure a DPA and avoid being convicted. Under its terms, Tesco paid a £129m fine and £3m investigation costs.
SFO director Lisa Osofsky said: ‘Tesco Stores Limited dishonestly created a false account of its financial position by overstating its profits.
‘The DPA clearly outlines the extent of this criminal conduct for which the company has accepted full responsibility.’
However, Aziz Rahman, senior partner at solicitors Rahman Ravelli, said: ‘If the DPA says that and yet the senior management have been acquitted, what has gone wrong?
‘The simplest and most obvious answer is that the DPA process is in clear and urgent need of recalibrating. In this case, we are finally getting to see the terms of a DPA which is nearly two years old and which clearly blames senior management—yet we only see it when all those being blamed have been cleared.
‘This points to the DPA process being flawed. Does it make it attractive for a corporate to admit wrongdoing and avoid the reputational damage of a prosecution, while leaving its senior figures to face the stress and strain of being prosecuted as individuals? That is what appears to have happened with Tesco.’
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