Around 10,000 shareholders of FTSE 100 supermarket giant Tesco can begin claiming compensation from today (23 August).
The compensation is for shareholders who suffered as a result of Tesco miss-stating it’s annual accounts in 2014. On 29 August 2014 Tesco issued a trading update regarding its likely profit for the first half of 2014/2015.
That statement was inaccurate and Tesco was forced to issue a correction in September of that year. The miss-statement caused the Tesco share price to fall.
The Financial Conduct Authority (FCA) adjudged that Tesco should pay compensation to shareholders.
Retail investors are entitled to 24.5p per share plus interest of 4 per cent per year. Investors who have been affected must make a claim, the compensation will not be paid automatically.
The deadline for claims to be made is 28 February 2018.
Tesco announced in March that it would pay compensation, with the scheme opening today. The scheme is administered by KPMG.
Investors need to submit a claim with KPMG, either through the claims portal or a postal claim form. When submitting their claim, investors will need to provide their personal details and evidence of Tesco share transactions.
The administrators will then consider the claim and decide the appropriate amount of compensation payable to the claimant under the compensation scheme.
If the claimant accepts this, they will then need to download the Notice of Acceptance and Release discharge form from the claims portal website, sign these documents and then upload them back onto the claims website portal.
The compensation claim will then be processed and paid directly to the claimant’s bank account.
Danny Cox, head of communications at Hargreaves Lansdown pointed out the various ways compensation may be paid.
"Compensation in respect of shares held within Isa is not paid directly back into the Isa. However the compensation can be paid in without the amount counting toward the annual Isa allowance.
"In the case of Sipp investments, claims must be made by the pension trustees. No action is needed by the investor. Compensation will be paid directly back into the Sipp and will not be treated as a contribution. This means the payment will not benefit from tax relief but also not count towards normal annual allowance entitlements.”
David.Thorpe@ft.com
