Tesco Chairman Sir Richard Broadbent Will Not Resign in Wake of Profit Misreporting Scandal

Tesco Chairman Sir Richard Broadbent has said it is up to shareholders to decide "whether I'm part of the solution or part of the problem", in the wake of the massive profit reporting scandal enveloping the company this morning.

Broadbent said he will not resign, but that he "always listens to shareholders".

Broadbent was alongside CEO Dave Lewis on a call with journalists, when Lewis confirmed that the Financial Conduct Authority has been contacted by Tesco on accounting issues.

Tesco has announced that it overstated its half yearly profit by £250m, but Broadbent has now said that he cannot be sure that this is the limit of the overstatement.

An internal inquiry has now been launched with accountancy firm Deloitte and law firm Freshfields enlisted, but neither Broadbent nor Lewis was able to confirm how long this inquiry will take.

Lewis said that the investigation will not have any impact on the company's turnaround.

He said: "When we have got to the bottom of what has happened, we will share it with you and the investment community. This is a huge thing, but it is only one of two things I will focus on. For us it's business as usual. Around the world we will be focused on giving better service. This investigation will have no impact on the determination of half a million people to give better service to customers."

Tesco's outgoing Finance Director Laurie McIlwee resigned in April, with successor Alan Stewart due to start in December. Broadbent was unable to confirm on the call when McIlwee had last been in the office, saying it "would not be sensible" to guess.

Asked whether Tesco will be looking to claw back executive bonuses, Broadbent said they would "take all necessary actions and won't hesitate to do so".

Earlier, it had been reported that Chris Bush, UK managing director, had been suspended with his position being filled by Robin Terrell. While Lewis confirmed that Terrell had taken over this position, he refused to speculate on Bush's future, saying he doesn't want to identify individuals.

Tesco's shares have plummeted by more than 8% on the back of this morning's revelations.