(FILES) This file photo taken on January 27, 2017 shows customers leaving a branch of a Tesco supermarket in London on January 27, 2017. AFP / Daniel LEAL-OLIVAS
London: Supermarket Tesco has agreed to a fine and compensation costs totalling £214 million ($268 million, 247 million euros) after an accounting scandal at Britain's biggest retailer, the Serious Fraud Office said Tuesday.
Under an SFO deal that draws a line under the scandal stretching back three years, Tesco will not face prosecution.
However, charges have previously been brought against three former Tesco executives, who will face trial over alleged fraud and false accounting.
"Tesco... has in principle reached a deferred prosecution agreement with the UK Serious Fraud Office regarding historic accounting practice," the supermarket giant said in a statement.
This "is a voluntary agreement under which Tesco Stores Limited will not be prosecuted provided the business fulfils certain requirements, including paying a financial penalty of £129 million".
In addition, Tesco will compensate shareholders by around £85 million in total.
Tesco had been accused of overstating profits by £326 million between February and September 2014.
Following the incident, the company appointed outsider and former Unilever executive Dave Lewis to replace long-standing chief executive Philip Clarke and oversee a drastic restructuring of the group, which in recent years has also faced fierce competition in the UK from German-owned discount retailers Aldi and Lidl.
"Over the last two and a half years, we have fully co-operated with this investigation into historic accounting practices, while at the same time fundamentally transforming our business," Lewis said in the statement.
"We sincerely regret the issues which occurred in 2014 and we are committed to doing everything we can to continue to restore trust in our business and brand."
The announcement comes amid growing investor opposition to Tesco's proposed £3.7-billion takeover of British wholesaling giant Booker.
Major Tesco shareholders Schroder Investment Management and Artisan Partners have demanded the board scrap the deal over the high price -- and branded it an unwelcome distraction from the supermarket's ongoing turnaround plans.
"The supermarket can now put the whole sorry saga of mis-stating its profits back in 2014 behind it," said ETX Capital analyst Neil Wilson.
"But it now has another fire to fight in the shape of a shareholder revolt over its proposed £3.7-billion buy-out of Booker."
Tesco is the world's third-biggest supermarket group after France's Carrefour and global leader and US giant Wal-Mart.
Booker meanwhile is Britain's biggest cash-and-carry operator and sells goods to more than 503,000 customers -- including grocers, pubs and restaurants.
It also owns convenience store chains Budgens, Londis and Premier, as well as wholesalers Makro and Booker Wholesale.
In midday deals on Tuesday, Tesco shares were down 0.1 percent at 189.85 pence on London's FTSE 100 index, which gained around 0.1 percent to 7,296.98 points.
