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The writing was on the wall following last month’s decision to bring Dave Lewis into the CEO role a month ahead of his start date. Today’s revelation that the company has overstated its first-half pre-tax profits by £250 million has seen the markets react aggressively.
When faced with uncertainty markets tend to factor in a worst-case scenario, but the £250 million accounting error has seen the share price fall significantly, knocking £1.5 billion off the company’s market capitalisation. Given that the Tesco chairman has stated he can’t be sure that this is the limit to the company’s overstatement, it is no wonder the markets have moved from worry to panic over the way management has been running the business.