London - AFP
Tesco shareholders are to sue the British supermarket giant for compensation after the revelation of profit overstatements sent its stock tumbling, a London law firm said on Tuesday.
Litigation firm Stewarts Law said directors and senior management "knew or were reckless" about the overstatement of profits.
Tesco revealed in October that it had overstated profits by £263 million ($413 million, 331 million euros), sparking a Serious Fraud Office (SFO) investigation.
"We expect to issue proceedings against Tesco in the High Court in London within six months," said Sean Upson, a partner at Stewarts Law.
"We do not intend to wait for the outcome of the SFO investigation which may take some years."
Tesco did not immediately respond for a request for comment.
Tesco shares dropped 15.5 percent by close of trading on September 22, the day that the company first announced there had been a profit overstatement.
Britain's number one supermarket and one of the world's top three, Tesco has faced a series of troubles and its sales have been eroded by stiff competition from discounters.
Its chairman, Richard Broadbent, resigned in the wake of the profit scandal, which also led to the suspension of a string of senior executives.
US investor Warren Buffett's Berkshire Hathaway since reduced its share in Tesco to under three percent from about five percent.
Buffett said his investment in the company had been a "huge mistake".
Tesco shares fell again on Tuesday after Stewarts Law announced its claim, and were down 2.71 percent at the close of trade at 188.15 pence.