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Tesco asks another senior executive to step aside

Tesco has asked a fifth senior executive to step aside as it probes an estimated £250m overstatement of its expected profits.

Britain's biggest retailer on Monday asked Kevin Grace, commercial director, to step aside as part of the investigation begun two weeks ago, according to people familiar with the situation. Tesco declined to comment.

Tesco
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Dave Lewis, Tesco's new chief executive, announced in September that a £1.1bn forecast of first-half profit released weeks earlier had been overstated. The matter related to the way the income that Tesco receives from suppliers is recognised.

Tesco has already suspended four senior executives. They are Chris Bush, managing director for the UK; Carl Rogberg, who worked with him in Tesco's business in Thailand and is UK finance director; John Scouler, food commercial director; and Matt Simister, who is responsible for sourcing.

The Financial Conduct Authority has informed the retailer it is carrying out a full investigation. This comes as further questions have been raised about the Tesco board's oversight after the Financial Times revealed the grocer had taken delivery of a new corporate jet, valued on the open market at more than $50m.

The company also sought to appease investors on Monday with the appointment of two new non-executive directors: Richard Cousins, a turnround specialist who runs catering group Compass, and Mikael Ohlsson, the former head of Ikea, who will join the board of the grocer in less than four weeks.

Tesco shareholders are meeting with Patrick Cescau, the senior non-executive director, to discuss how much further the board needs to be reshaped.

More from the Financial Times:
Tesco takes soundings over board make-up
Tesco's Neds get nod to kick-start change
Ex-Ikea chief to bring openness to Tesco

Mr Cescau will gather the investors' views and will discuss them with the remainder of the Tesco board in due course, people familiar with the situation said.

Some shareholders expect further board changes. Ken Hanna, chairman of the audit committee, and Jacqueline Tammenoms Bakker both became non-executive directors in 2009, bringing them close to their expected six-year tenure at Tesco.