Tesco's Dan Jago suspended as investigation into £250m profit overstatement continues

By Gemma McKenna

Published: 14 October, 2014

Dan Jago, Tesco's global head of wine, beer and spirits, has been suspended along with two other directors as the investigation into the £250 million accounting blackhole at the retailer continues.

Dan Jago Tesco's global BWS head Dan Jago has been suspendedThe investigation into the £250m profit overstatement has seen a further three executives suspended today, including Jago.

Harpers understands that Jago, alongside William Linnane, director of impulse purchases, and Sean McCurley, director of convenience, were asked to step aside as the investigation continues. Tesco has not named the executives invovled.

Tesco has now suspended a total of eight directors and executives, as Deloitte accountants and lawyers from Freshfields firm analyse how the extra £250 million made it onto Tesco's profit list.

The three directors suspended today were responsible for negotiating deals with some of the world's biggest suppliers. In the drinks world this would include Diageo, Pernod Ricard, AB-InBev and Carlsberg among others.

A statement from Tesco read: "We have asked three employees to step aside to facilitate the investigation into the potential overstatement of profits in UK food for the first half of the year. We will provide an update on the investigation with our interim results on October 23."

Last week we spoke to a range of wine suppliers about what goes on behind the scenes at the major supermarkets in light of the Tesco accounting scandal, but most said it was up to suppliers to push back against demanding buyers when negotiating deals. They also said suppliers should "understand the rules of the game they're playing" and prepare well for meetings.

One supplier, who preferred not to be named, told Harpers.co.uk he was "not that surprised" to hear of the accounting error. He added that Dave Lewis, not being "a Tesco man" had put a stop to practices he thought odd - such as suppliers being invoiced for certain things at key times of the year (just before reporting periods). "It's just a way that Tesco have of doing things that's different from what others do."

"If you were getting on well with Tesco you would find a way to make it happen, and you would get your reward a couple of months later."

Ex-Somerfield buyer Angela Mount told Harpers.co.uk that when major retailers are under pressure, such as when Somerfield issued a profits warning, buyers could be asked to renege on deals with suppliers. Speaking of her experiences at that time she said: "Being very blunt about it, and since Somerfield no longer exists, and I can speak openly, we were asked to bring money forward from the next financial year and were told if you have to delist and bring in products that you will get more cash on, then do it."

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