Chris Bush, the chain’s ex-UK managing director, and former food commercial director John Scouler, denied the charges.
They were accused of being aware that income was being wrongly included in the company’s financial records to meet targets and bolster the company’s financial position.
The issue came to public attention in September 2014 when the UK’s largest retailer told the City that financial statements issued the previous month had overstated profits by about a quarter of a billion pounds.
The trial, at Southwark Crown Court, was formally halted on Thursday after the jury was informed that the judge had thrown out the case and that the decision had been upheld at the Court of Appeal.
Trial judge, Sir John Royce, told the court: “I concluded that, in certain crucial areas, one in particular, that the prosecution’s case was so weak that it should not be left for a jury’s consideration.”
He added that the “real weakness” was the question of proving knowledge.
During the trial, the jury was told the case was a retrial, and that a third man, former UK finance director Carl Rogberg, is charged with identical offences but is not currently well enough to stand trial.
A decision is now due to be made by the SFO in relation to its case against Mr Rogberg following the acquittals of Mr Scouler and Mr Bush.
The latest legal development came to light 20 months after Tesco reached a so-called Deferred Prosecution Agreement with the SFO in connection with the profit overstatement, which saw the company take a fine and agree to compensate shareholders without addressing the issue liability.
In a statement, Mr Bush said: “While I am delighted that my innocence has finally been established, it is troubling that Mr Scouler and I were ever charged.
“Put simply, these charges should never have been brought, and serious questions should be asked about the way in which the SFO has conducted this investigation.
“In my view, the SFO wholly failed to investigate this case thoroughly, independently or fairly from the outset.”
Richard Sallybanks, a partner at BCL Solicitors who represented Mr Scouler, said: “We have long argued that the SFO’s prosecution of Mr Scouler was fundamentally flawed, that he should not have been charged and that the SFO should not have proceeded with this trial.
“Mr Scouler has maintained since the outset of this investigation that he was not guilty of fraud and false accounting, and those close to him always knew that to be the case.”
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