Grocery retailer giant Tesco hires former Marks & Spencer Group Chief Financial Officer Alan Stewart to fix the retailer's miscalculated accounting reports.
Tesco had a major blow this month after the company stated that it got its reports wrong by "overstating income and understating costs." The miscalculation was also brought about by the company not recording its payments as soon as it placed orders with suppliers, according to Reuters.
Stewart is stepping as CFO earlier than expected. He was supposed to take up post on Dec. 1.
The England-based businessman and former WH Smith Plc finance chief resigned from Marks & Spencer in July to work in the second largest retailer in the world.
"His first task this morning will obviously be to look at Tesco's accounting practices, but they will need to move on fairly quickly to devise a new strategy to revive the business," as quoted by Bruno Monteyne, an analyst at Sanford C. Bernstein in Bloomberg.
"The accounts will need to be cleaned up and they will be cleaned up, I have no doubt in my mind about that," he added.
Tesco reportedly cut its first-half profit outlook by 250 million pounds ($408.50 million). Also, Tesco reportedly suspended four of its employees following the major accounting issue facing the company.
Chris Bush, managing director of Tesco UK was reported to be one of the four suspended employees, according to BBC and Sky News.
To make things worse, Tesco was left without a finance director. Former chief Laurie McIIwee resigned from his post a week before the scandal broke. He reportedly resigned after disagreements with chief executive Philip Clarke.
Tesco's stocks dropped down dramatically 3.3 percent to 196.35 pence in London trading, reporting its lowest since 2003.
Stewart joins in as Tesco hires outside auditors to investigate on the accounting issue.
Meanwhile, Stewart will get an annual salary of 750,000 pounds and standard benefits, 30 percent more than his pay in Marks & Spencer.
