Investigation into Tesco's £250m profit shortfall unearths 'corruption' of culture

Sir Richard Broadbent, Tesco’s chairman, is under growing pressure, while former boss Philip Clarke is facing questions about his role. Mr Clarke was replaced by Mr Lewis on September 1 and was in charge of Tesco’s finances for the majority of the period in question.

Tesco shares fell by 16pc last week as the City reacted to the crisis. However, its struggles are good news for one of Britain’s biggest hedge funds, Lansdowne Partners, which is sitting on a profit of more than £65m as a result of the debacle. Lansdowne, which is run George Osborne’s best man Peter Davies, holds a short position of 0.62pc in Tesco shares. According to filings with the Financial Conduct Authority, it first took this position in November 2012. Since then, shares in Tesco have fallen by more than 40pc, meaning that Lansdowne is sitting on a healthy paper profit.

One former supermarket executive said it was likely that management and the buyers at Tesco had been under “extreme pressure” as sales fell in 2014. They said the practice of bringing forward profit is likely to have been “widespread” given the scale of the shortfall and questioned the quality of the governance at Tesco.

“It does not take a whistleblower to discover this,” they said. “You have to be seriously off the pace not to know this is what was going on.”

One of the criticisms of Sir Richard is the lack of retail experience on Tesco’s board and the fact the company had been operating without a dedicated finance director after the resignation of Laurie McIlwee in early April. However, it is understood that the retailer has identified a potential new non-executive with a retail background and was close to making an announcement before the discovery of the accounting black hole last week. One of the contenders is John Gildersleeve, a former Tesco director who is chairman of British Land.

Shareholders are furious at the debacle, but there is not thought to have been a direct request for the chairman to resign. Tesco has said it will provide details about what the investigation uncovers in its interim results on Oct 23, which have been delayed by three weeks following the discovery of the shortfall.

Tesco declined to comment on the investigation.

more