Tesco UK Managing Director Chris Bush 'Suspended' Following Profit Overstatement

Tesco CEO Dave Lewis has confirmed that four senior members of his staff have been asked to step aside after the retail giant overstated its profit by £250m.

The Guardian has learnt that UK Managing Director Chris Bush is one of the four staff to have been suspended, with Robin Terrell, the head of its online operations, taking over the role temporarily.

Tesco's shares have plunged by more than 8% this morning in the wake of the news, with Dave Lewis telling analysts that the overstatement was discovered on Friday, despite only being announced today.

An internal investigation is set to be launched, with accountancy firm Deloitte and legal firm Freshfields also having been enlisted to get to the bottom of the mess.

Tesco warned investors on 29 August to expect £1.1bn profit for the half year to 23 August, a figure which had been revised down from an initial estimate of £1.6bn one year previously. Now, investors have been warned that the figure will be almost half the initial prediction, with Tesco announcing a new six-monthly profit of £850m.

"We have uncovered a serious issue and have responded accordingly. The chairman and I have acted quickly to establish a comprehensive independent investigation. The board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear," Lewis said, in a call on which he was joined by Chairman Richard Broadbent.

Lewis said on "the question about the breaking of rules, we are clear there is an issue here" and pledged to find out exactly what went on.

Analysts have been speculating as to how much Lewis knew. Cantor Fitzgerald, the financial services firm which has been raising concerns over Tesco's accounting practice for some time, wrote in a note: "We suspect Dave Lewis was aware of Tesco's actions while at Unilever and from comments across the UK/Global supplier base so we expect he already had several questions for Tesco's commercial team when he joined."