Tesco says UK authorities to investigate after profits were overstated

MarketsAssociated Press

Tesco, one of the world's largest food retailers, says U.K. authorities are conducting a full investigation after its half-year profit was overstated by 250 million pounds ($407 million).

Tesco said Wednesday it will cooperate fully with the Financial Conduct Authority probe. The company had already launched an internal investigation conducted by Deloitte.

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The announcement adds to the woes of the supermarket giant, which is struggling to compete with low-cost rivals. The new probe will also further complicate the tenure of new chief executive Dave Lewis, who has been tasked with turning Tesco around.

The company has suspended four executives but has declined to describe the matter as a disciplinary action.

Tesco has long dominated the supermarket industry in Britain, but has recently been squeezed by aggressive cost-cutting competitors.