British retailer Tesco says chair resigns after accounting scandal, 99 percent drop in profits

Markets Associated Press

The chairman of Tesco, the world's second-biggest retailer behind Walmart, has resigned amid an accounting scandal in which the company admitted it had overstated its profits.

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Richard Broadbent announced his resignation Thursday as the company reported a 99 percent drop in first-half net income to 6 million pounds ($9.6 million).

Tesco launched an investigation last month after discovering its first-half earnings estimate had been inflated by about 250 million pounds due to alleged accounting errors that booked some income too early while delaying the recognition of some costs.

On Thursday, it said profits had been overstated by 263 million pounds, slightly more than initially flagged.

The question remains as to whether this was an accident or there was a deliberate effort to massage the results as Tesco struggled financially.