TSCDY Tesco PLC (PK)

By Razak Musah Baba

LONDON--More than 125 funds who hold shares in Tesco PLC (TSCDY) are seeking 100 million pounds ($122 million) in damages from the company after it reported an over-statement of earnings.

Bentham Europe, part of a litigation finance group, said Monday in a statement that the legal action would seek to prove that Tesco made statements to the stock market that omitted information crucial for investors.

The company wasn't immediately able to comment.

In October 2014, the U.K.'s biggest supermarket chain announced it had previously over-stated its profits by GBP263 million. That led to a 92% drop in interim profits, which cut a further GBP1 billion from Tesco's market capitalization, Bentham said. An initial disclosure in September wiped GBP2 billion off the company's value.

Tesco shares at 1420 GMT traded down 5 pence, or 2.5%, at 210 pence, valuing the company at GBP17.20 billion.

Bentham is funding and managing the litigation, with Stewarts Law leading the case on behalf of institutional shareholders.

Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

(END) Dow Jones Newswires

October 31, 2016 12:44 ET (16:44 GMT)

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