Tesco CEO Says He Had No Idea The Chain Was About To Implode When He Took The Job

When former Unilever executive Dave Lewis took over as Tesco's new CEO in July - three months earlier than expected - he had no idea of the time bomb he was inheriting.

In September, the world's second largest retailer announced that it overestimated its first-half profits by £250 million ($408 million), sending shares crashing. The British-based grocery chain swiftly axed four senior executives and hired an independent firm, Delloite to investigate the accounting scandal.

Today, the Delloite review confirmed that Tesco overstated its profits by £263 million. The company also announced that Sir Richard Broadbent would step down as chairman. A bunch of other executives have been asked to leave.

Following disastrous sales and revenue figures on Thursday, Lewis explained how the investigation has been carried out so far: "The Tesco part of the investigation and the Delloite part of investigation has been focused on identifying around commercial income exactly what the numbers are."

Lewis also said that Delloite has prevented the company from continuing its own investigation: "What we can't do is start an investigation around how those numbers came about and what it was that caused those numbers to be there because there will be an investigation by the regulator and we will be very open and very proactive in our support of their investigation but it's not for us to start that investigation - that's something that we have to support them with. So we have to wait for that."

And Lewis said he would have taken the executive role even if he had known about Tesco's structural problems before being given the job. It's an extraordinary admission because it implies that the people who hired him - Broadbent et al - didn't tell him about the disaster looming inside Tesco's books until after he arrived. Lewis had some idea that things were sliding at Tesco, of course. When former CEO Philip Clarke stepped down, revenue was tanking. Tesco's problem's were market-related and Lewis, a marketing guru, was probably under the impression he could swoop in and turn things around.

But Tesco's problems actually ran much deeper - words like "cover-up" and "whistleblower" are being thrown around - something Lewis was probably not aware of.

Here's what Lewis said:

On Thursday, Tesco reported a steep fall in sales and revenue, down 4.6% and 4.5%, respectively. Pre-tax profit is down 91.9% from the same period last year to £112 million.