The probe comes after a different investigation found the error was worse that first thought and the retailer had been overstating for years
The Serious Fraud Office today began a criminal probe into Tesco’s £263million profit scandal.
The move deepened what has become the biggest crisis in the supermarket giant’s 95-year history.
Tesco has been left reeling since it admitted last month to “overstating” half-year profits by £250million.
But new boss Dave Lewis last week revealed the black hole was £263million, and went back at least two years.
The SFO has been liaising closely with City watchdog the Financial Conduct Authority, which had already launched an inquiry into the affair.
It was decided to hand the case to the SFO because it has more power. The agency can require individuals to be interviewed, seize documents and raid premises with the help of the police.
Tesco, which says nobody gained personally from the episode, has suspended eight executives since it ordered an internal probe into the affair.
It is withholding pay-offs totalling around £2million to ex-chief executive Philip Clarke and former finance director Laurie McIlwee pending the outcome of the investigations.
In a statement, it said: “Tesco confirms that it has been notified by the Serious Fraud Office that it has commenced an investigation into accounting practices at the company.
"Tesco has been co-operating fully with the SFO and will continue to do so.”
Britain’s biggest supermarket has been struggling against fierce competition from cut-price rivals such as Aldi and Lidl.
Its profits fell 92% in the six months to August 23, from nearly £1.4billion to just £112million.
