Reuters

The Financial Conduct Authority has launched a large scale investigation into Tesco after the British grocer admitted that it had overstated its profits by £250m

Tesco confirmed in a brief statement that the regulator has notified the British retailing giant of the probe and that it is related to its overstatement of profits, which is currently the subject of an independent review by Deloitte.

"Tesco will continue to co-operate fully with the FCA and other relevant authorities considering this matter," it added.

Tesco shares tumbled on 23 September despite the troubled British retailer revealing that it has parachuted in the former chief financial officer for Marks & Spencer, Alan Stewart, to help turn around the company.
Stewart was brought in more than two months ahead of schedule after Laurie McIlwee left just over a week ago.

Tesco had already cut its full-year profit forecast from £2.8bn (€3.6bn, $4.5bn) to £2.4bn in August.

It has also since suspended four executives, including UK managing director Chris Bush, while media reports have speculated that the others include food commercial director John Scouler and the head of food sourcing, Matt Simister.

Tesco has also launched an internal investigation, led by Big Four accountancy firm Deloitte.

The Financial Reporting Council said it is observing the developments and may launch a probe after the results of the internal investigation are published.

Since then a report revealed that a whistleblower had notified the group about concerns over its profit declarations but was "ignored for months".

It has also tapped banks for an expansion of an existing credit facility to the tune of £2.5bn to safeguard itself from any credit ratings downgrades.