Tesco executives might face parliamentary enquiry over accounting error

Tesco executives might have to face questions in parliament after its "stratospheric" error over profits, the chairman of the UK Parliamentary Business Committee, Adrian Bailey told the BBC.

Speaking on Radio 5 live's Wake Up To Money, he said,  it was "unbelievable" that the retailer could get into "such a mess".

On Monday, Tesco admitted to overstating its guidance for half-yearly profits by £250 million.

The UK's accountancy watchdog said it was "monitoring the situation closely.''

The Financial Reporting Council, however, said it would hold back action until Tesco's own investigation was completed.

According to Tesco, its new chief financial officer, Alan Stewart, would be joining the company immediately, more than two months ahead of the date planned earlier.

He comes as a replacement for Laurie McIlwee, who resigned from Tesco in April but would not be leaving the company officially until October.

On Wednesday evening, Tesco admitted that McIlwee had had nothing to do with the retailer's financial matters since he resigned.

"Tesco stated on the 4th of April that until he officially left the company in October, Laurie McIlwee would be available to carry out transitional activities and support handover with colleagues as required," the company said.

Bailey, the chairman of a British parliamentary committee of lawmakers said executives may need to explain themselves as the accounting blunder caused £2 billion to be wiped off the group's value, International Business Times reported.

"We may well as a committee want to look at this. Not just at Tesco but at what is going on in the retail industry and in the relationship with the suppliers to see if the issues we came across two years ago are still there."

The past couple of years had seen Tesco steadily lose value and fall amid price wars, loss of market share and leadership changes.

Tesco shares plunged on 23 September even as the troubled UK retailer revealed that it had inducted former chief financial officer for Marks & Spencer, Alan Stewart, to help turn around the company.

Stewart was brought in over two months ahead of schedule after Laurie McIlwee left just over a week ago.

The retailer had already cut its full-year profit forecast from £2.8 billion to £2.4 billion in August.

Also it had suspended four executives, including UK managing director Chris Bush, while media reports had speculated that the others included food commercial director John Scouler and the head of food sourcing, Matt Simister.