Tesco chairman John Allan resigns over abuses

Tesco chairman John Allan is to step down next month after eight years in the role after allegations over his behavior towards women could “derail” the UK’s biggest supermarket chain.

Allan, also a former chairman of the CBI’s business lobby group, denies three separate allegations of misconduct. He apologized unreservedly for the fourth charge, in which he admitted telling a female CBI employee that her clothes “suited her figure”.

With his impending departure from Tesco, CBI’s future remains in doubt. More than a dozen women have filed separate complaints about a toxic culture at the lobby group, as well as sexual harassment, bullying and other workplace abuse.

The City veteran will resign on June 16, at Tesco’s annual meeting, the supermarket group announced on Friday. Tesco has already been looking for Allan’s successor, as his term is about to expire. According to the statement, it will close “in the near future”. Byron Grote, the supermarket’s independent chief executive, will serve as interim chairman.

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The three charges Allan denies include two separate alleged incidents of touching a woman’s bottom at a CBI dinner in May 2019 and then at Tesco’s annual shareholder meeting in June last year. Allan also denied claims he made comments about a woman’s bottom in 2021.

Tesco said on Friday it had found no evidence or complaints about the AGM or Allan’s conduct during his tenure after launching a “comprehensive review of the allegation” reported by The Guardian newspaper in the wake of the scandal this month. which absorbed the CBI.

The company, which sought outside legal advice from law firm Freshfields, said it had contacted those attending the meeting, including former employees, and asked them to come forward if they had any concerns.

Tesco was rocked by an accounting scandal when Allan joined in 2015 after overstating its profits by £263m. The FTSE 100 company has reached a £129m prosecution agreement with the Serious Fraud Office over the case. As chairman, Allan presided over the revival of its fortunes under former chief executive Dave Lewis and hired current Tesco boss Ken Murphy.

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Allan, who is also chairman of housebuilder Barratt Developments, said on Friday: “I regret to resign as chairman of Tesco Plc. due to the anonymous and unfounded allegations made against me, as reported by the Guardian. These allegations are completely unfounded, as evidenced by Tesco’s internal procedures.”

He added: “Tesco has carried out an ‘extensive internal review’, asking Tesco employees and ex-employees to come forward anonymously if they have concerns about my behaviour. Tesco also contacted those who attended the meeting where the incident allegedly took place and reviewed video recordings of the meeting. There is no evidence of any wrongdoing at that time or at any stage during my chairmanship of Tesco and I remain determined to prove my innocence.”

Grote praised the 74-year-old for his “valuable contribution to Tesco” but said the allegations could be a “distraction”. He added that the board’s search for a new chair was “progressing well.” According to previous reports, Allan could leave early next year.

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Barratt, where Allan will resign in September, declined to comment.

Dr Clive Black, retail analyst at Shore Capital, said it was “unfortunate that something like this is going to be a part of grocery history”.

He added: “The board will want someone who can demonstrate, primarily to shareholders and wider stakeholders, that this is a business that stands up for what is right and someone who can bring quiet stability.”

Source: https://www.ft.com/content/e330d3dc-c079-4eb5-b4a6-0b884cf562ed