UK retailer Tesco is being sued by a US pension plan after an accounting error caused it to overstate its profit.
The supermarket chain, which disclosed last week that it had overstated profits by £263m (€334m), is being sued by the $181m (€143m) Irving Firemen’s Relief and Retirement Fund over “significant losses” incurred due to the error.
The Texan pension fund claimed in a filing seen by Bloomberg that it acquired the retailer’s shares at artificially inflated prices.
Tesco’s share price has been in gradual decline over the last year, standing at more than 371 pence in late October last year, but falling to 168 pence by Friday closing.
In other news, the Pension Protection Fund (PPF) has acquired a 10% share in airline Monarch as part of a deal to rescue the company.
The airline has attracted a £125m investment from Greybull Capital, granting the private equity company a 90% stake.
The agreement will also see the underfunded Monarch Airlines Retirement Benefit Plan fall into the UK lifeboat scheme, which the company said had a deficit of £158m.
Alan Rubenstein, chief executive at the PPF, welcomed the deal, which has been signed off by the Pensions Regulator.
“We have been in lengthy and detailed negotiations with the numerous interested stakeholders for some time to ensure the interests of members and levy payers are protected,” he said.
“It is very important to us that pensions liabilities are treated seriously and properly on any restructuring. We are pleased that those involved with the Monarch case understood this fundamental point.”