SUPERMARKET Tesco has suspended four executives, including its UK managing director, and called in independent accountants and lawyers after the supermarket overstated its half-year profit guidance by £250m.

The supermarket chain says it is now working to establish the impact of the issue on its full-year results.

On 29 August, Tesco warned investors to expect profit of about £1.1bn for the six months to 23 August, down from £1.6bn a year earlier. Discovery of the overstatement means Tesco’s first-half profit will almost halve to about £850m.

The overstatement was discovered at Tesco’s troubled UK food business as the supermarket prepared to publish its first-half results. The group is working to find out the extent of the problem and the effect it will have on annual profits.

Tesco chief executive Dave Lewis told City analysts he found out about the overstatement on Friday when Tesco’s general counsel showed him a report into the UK food business. He said the problem was not in the ordinary course of events and that rules may have been broken.

“We have asked four people, senior people, to step aside. That is across commercial and business operations.

“We are clear there is an issue here. We will let the investigation determine whether any rules were broken and what I need to do to address that.”

"We have uncovered a serious issue and responded accordingly," said Mr Lewis.

UK managing director Chris Bush is one of those suspended, according to reports.

On 29 August, Tesco had said it expected its trading profit for the six months to 23 August to be about £1.1bn.

In its latest statement, Tesco said the profits overstatement was "principally due to the accelerated recognition of commercial income and delayed accrual of costs".

It also said some of the error - which referred to its expected profits for the six months to 23 August - was due to "in-year timing differences".

The error emerged when the firm was preparing its interim results.

It had originally planned to publish these on 1 October, but they have now been pushed back to 23 October.

Deloitte will carry out its investigation with Freshfields, the group's external legal advisers.

Tesco's usual auditor is PricewaterhouseCoopers.