Former Tesco bosses Chris Bush and John Scouler cleared of £250m fraud after case collapses

Business correspondent(wp/es):

Two former Tesco directors have been cleared of fraud and false accounting after they were accused of manipulating the company's profits. 

The firm's shares plummeted by nearly 12 per cent, wiping £2billion off the share value, when Tesco announced in September 2014 that a statement the previous month had overstated profits by £250million.

Chris Bush, ex-UK managing director, and John Scouler, the then UK food commercial director, were accused of being aware that income was being wrongly included in the company's financial records to meet targets and make Tesco look financially healthier than it was.

But on Thursday at Southwark Crown Court, the jury was told that they had been acquitted at the Court of Appeal.

The acquittal came after trial judge Sir John Royce dismissed the case brought by the Serious Fraud Office (SFO), bringing the trial to a halt after the prosecution presented its case.

The SFO went to the Court of Appeal regarding the dismissal, but its appeal was dismissed on Wednesday.

Mr Scouler, 50, from St Albans, and Mr Bush, 52, of High Wycombe, were each cleared of one count of fraud and another of false accounting.

During the trial, the jury was told the case was a retrial, and that a third man, former UK finance director Carl Rogberg, is charged with identical offences but was not currently well enough to stand trial.

A decision will be made in due course about what action should be taken in relation to Rogberg following the acquittals of Mr Scouler and Mr Bush.

The trial of Mr Scouler and Mr Bush, which began on October 8, had been expected to last three months.

Mr Bush said: “While I am delighted that my innocence has finally been established, it is troubling that Mr Scouler and I were ever charged. 

“Put simply, these charges should never have been brought, and serious questions should be asked about the way in which the SFO has conducted this investigation.”

Richard Sallybanks, partner at BCL Solicitors, representing John Scouler, added: "We are delighted that Mr Scouler leaves court today knowing that the judge, having heard the entirety of the prosecution evidence, reached the firm conclusion that he had no case to answer.

"That decision was obviously correct yet the SFO chose to pursue an appeal which was rejected yesterday when the Court of Appeal refused even to grant leave.

"We have long argued that the SFO's prosecution of Mr Scouler was fundamentally flawed, that he should not have been charged and that the SFO should not have proceeded with this trial."

Sterling's fate hangs on Brexit, UK growth to be weak - Reuters poll

Business correspondent(wp/Reuters):
Sterling’s near-term fate hangs on whether British Prime Minister Theresa May manages to get her Brexit withdrawal deal through Parliament, according to Reuters polls that also found economic growth will be weak.

May faces deep opposition in parliament ahead of a Dec. 11 vote on her withdrawal agreement, raising the risk of a no-deal Brexit shock to the economy in less than four months’ time.

She suffered embarrassing defeats on Tuesday at the start of five days of debate over her deal to leave the European Union that could determine the future of Brexit and the fate of her government.

If the deal is agreed, sterling GBP= will gain 3.5 percent, according to the median in a poll of foreign exchange strategists taken mostly as Parliament debated the deal, but if it fails to pass the pound will fall by 2.75 percent.

“Our colleagues are right to flag the risks that Parliament could initially reject the deal. This inevitably leads to a knee-jerk sell-off in GBP,” noted BofAML analysts.

“We think there is likely to be a material repricing of the UK rates curve once a deal is announced and ratified, which in turn is likely to be bullish for GBP.”

Sterling has ricocheted on each piece of Brexit news, largely ignoring economic data. As predicted in Reuters polls ahead of the June 2016 referendum on EU membership, it has fallen versus the U.S. dollar, down well over 10 percent on Wednesday from pre-vote levels.

There is still only a median 25 percent probability no agreement is reached before Britain is due to leave the EU on March 29, unchanged from a November poll. It has been between 20 and 30 percent since Reuters began asking in July 2017.

Instead, almost 90 percent of economists who answered an additional question expect the most likely outcome to be the two sides agreeing a free-trade deal, as they have since Reuters began polling on this in late-2016.

Still in second place was leaving without an agreement and trading under basic World Trade Organization rules. And once more in third place was Britain being a member of the European Economic Area, paying into the EU budget to maintain access to the EU’s single market.

While the second and third outcomes were a close call, Brexit being cancelled was seen as unlikely and no respondent pegged this as the most likely scenario.

“The outcomes are obviously up in the air at present. But as it currently stands, some form of Free Trade Agreement looks to be the most likely option,” said Peter Dixon at Commerzbank.

Median forecasts in the wider foreign exchange poll pegged sterling at $1.29 in one month, $1.34 in six months and $1.37 in a year’s time, little-changed from a November poll. It traded around $1.275 on Wednesday.

The dollar has enjoyed unrivalled performance against its peers this year but will be undermined in 2019 on increasing concern about slowing U.S. economic growth, a poll showed. [EUR/POLL]

Against the euro EURGBP= the pound will be little moved from Wednesday’s level in one month when a euro will get you 89.0 pence. In six months and a year it will be worth 87.0p.

SLOW GROWTH

With little clarity about the terms under which Britain and the EU will part ways, British services firms were clobbered last month, leaving the economy at risk of contracting, a survey showed on Wednesday. [GB/PMIS]

The poll predicted Britain’s economy will expand 0.3-0.4 percent per quarter from here through to mid-2020, largely underperforming its peers.

It will grow 1.3 percent this year and a still modest 1.5 percent next year and in 2020, according to the poll of 76 economists, slower than ahead of the EU vote.

Still, a post-referendum recession never materialised and economists gave only a median 25 percent chance of one in the coming year and 30 percent within two years.

Inflation has held stubbornly above the Bank of England’s 2 percent target - and is not expected to be back there until the third quarter next year - yet the central bank has kept monetary policy loose.

It is not expected to raise the Bank Rate from the current 0.75 percent until at least April, when it will add 25 basis points. A subsequent 25 basis point increase is not expected until early-2020.

Only one of 77 economists polled expects the Bank to increase borrowing costs at its next policy decision on December 20.

Britain suspends £2 million golden visas to tackle money laundering

Staff reporter(wp/Reuters):
Britain will suspend its top tier investor visas, which require 2 million pounds ($2.55 million) in investment, as part of a drive to crack down on organised crime and money laundering.

From Russian oligarchs and Middle Eastern oil barons to newly-minted Chinese entrepreneurs, the wealthy have flocked to London over the past two decades, snapping up everything from opulent homes to soccer clubs.

The influx of super-rich has brought tens of billions of pounds in investment and helped London preserve its position as one of the world’s top two global financial capitals, though the government has been concerned by the provenance of some of the wealth.

“I have been clear that we will not tolerate people who do not play by the rules and seek to abuse the system,” Immigration Minister Caroline Nokes said.

“That is why I am bringing forward these new measures which will make sure that only genuine investors, who intend to support UK businesses, can benefit from our immigration system,” Nokes said.

The tier 1 investor visas, which offered non-European Union residents over three years entry in return for 2 million pounds in investment in United Kingdom bonds, share capital or loan capital in UK companies, will be suspended from midnight on Dec. 7.

After the changes, applicants seeking to invest in the United Kingdom will have to provide comprehensive audits of all their financial and business interests, the interior ministry said. The audits will have to be carried out by UK registered auditing firms.

Those seeking such visas will have to prove they have control of the investment needed. Such investors will not be able to simply buy government bonds.

Around 1,000 applications were made for such visas in the past year.

Britain’s National Crime Agency, which tackles serious and organised crime, said in September it was stepping up efforts to tackle dirty money funnelled into or through the United Kingdom by “corrupt elites”.

It said it planned to extend the use of Unexplained Wealth Orders (UWOs), one means by which the assets of corrupt “politically exposed persons” or those with links to serious crime can be seized.

In October, it was revealed that the first target of a UWO was the wife of a jailed Azeri banker from whom the authorities seized property worth about 22 million pounds.