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Tesco chair Allan to step down after inappropriate behaviour claims

A general view of Tesco

By James Davey

LONDON (Reuters) -Tesco chairman John Allan will step down at the group's annual shareholders' meeting next month, with Britain's biggest retailer saying claims of inappropriate behaviour against him risked becoming a distraction to the business.

One of Britain's highest-profile corporate names, Allan, 74, is often featured in British media commenting on retail and general business matters. He has chaired Tesco since 2015 and also chairs housebuilder Barratt Developments, where he is due to step down in September.

The supermarket group said on Friday that his tenure as chairman was in any case due to end shortly, with a succession planning process making progress and expected to conclude in the near future.

However, prior to Friday's update from Tesco, Allan was due to seek re-election at the June 16 annual general meeting (AGM) and in a statement he said he regretted having to prematurely stand down.

Tesco said that pending the appointment of a new chairman, senior independent director Byron Grote will become interim chair and will chair the AGM.

Earlier this month, the Guardian newspaper reported that Allan was facing claims of inappropriate behaviour from four women.

One of the allegations relates to Allan's conduct at Tesco and three to his time at business lobby group the Confederation of British Industry (CBI), where he was president from 2018-2020.

Three of these allegations are vigorously denied by Allan, and for the other Allan unreservedly apologised for a comment he made, Tesco said.

One of the allegations related to Tesco's AGM in 2022. In response, Tesco instigated an "extensive review", which did not identify any evidence or complaints in relation to Allan at the AGM or at all in his tenure as Tesco chairman.

"While we have received no complaints about John's conduct and made no findings of wrongdoing, these allegations risk becoming a distraction to Tesco," Grote said.

He thanked Allan for his "substantial contribution" to the business.

"It is with regret that I am having to prematurely stand down from my position as Chair of Tesco Plc following the anonymous and unsubstantiated allegations made against me, as reported by the Guardian," Allan said in a statement.

"I remain determined to prove my innocence," he said.

When Allan joined Tesco in March 2015, the group was in the early stages of recovery from an accounting scandal that knocked millions of pounds off its profits and billions off its share price.

Five years later then CEO Dave Lewis and Allan were able to declare Tesco's turnaround complete, with its position once again reinforced as the clear market leader among Britain's supermarkets.

Allan also steered Tesco's board through the COVID-19 pandemic and appointed Ken Murphy as Lewis' successor.

Shares in Tesco closed down 0.6%.

(Reporting by James Davey and Sarah Young; editing by Kate Holton and Louise Heavens)