LONDON: The new head of Britain’s biggest retailer Tesco has suspended four senior executives and launched an independent investigation after the troubled supermarket revealed on Monday it had massively overestimated profits.

Following preliminary investigations into its UK food business, Tesco said its profit for the six months to August 23 “was overstated by £250 million ($408m, 318m euros)”.

The company did not specify which profit indicator this referred to. It has previously forecast its half-year trading profit at £1.1 billion.

Monday’s shock announcements sent Tesco’s share price sliding almost 12 per cent in early deals. It later pulled back but was still down a hefty 8.41pc at 210.3 pence on London’s benchmark FTSE 100 index, which was down 0.75pc to 6,786.97 points overall.

“We have uncovered a serious issue and have responded accordingly,” Tesco’s new chief executive Dave Lewis said in a statement issued by the company, which is the world’s third-biggest supermarket group after France’s Carrefour and global leader, US retailer Wal-Mart.

“The chairman and I have acted quickly to establish a comprehensive independent investigation,” said Lewis, who took the helm at the start of September in a bid to turnaround Tesco, which has now issued a third profit warning in just nine weeks.

“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 later told reporters that Tesco had “asked four people to step aside so we can be sure we do the fullest and frankest investigation”.

A spokesman confirmed that the four were “senior executives” at the group but refused to say if UK managing director Chris Bush was among the quartet despite Lewis announcing also that Robin Terrell had been appointed to lead the UK business. Tesco said it would now publish its interim earnings on October 23, three weeks later than had been planned in the wake of the probe being carried out by accountancy firm Deloitte, which will work closely alongside Freshfields, the supermarket’s outside legal advisers.

Published in Dawn, September 23rd , 2014