Patisserie scandal probed by fraud office after CFO’s arrest
Patisserie Holdings Plc finance chief Chris Marsh was arrested as U.K. fraud prosecutors opened a probe into an accounting scandal that threatens to shutter the cake baker’s 200-plus stores.
The owner of the Patisserie Valerie chain said in a statement Friday that Marsh was arrested overnight and has been released on bail. The U.K.’s Serious Fraud Office said in a statement that it had opened a criminal probe of an individual but declined to comment further.
The latest disclosure comes after the company warned Thursday that it will have to shut down unless it gets an “immediate injection of capital,” escalating the drama swirling around a company that appeared healthy until days ago.
Shares of Patisserie Holdings, owned in part by British restaurant entrepreneur Luke Johnson, have been suspended since Wednesday, when the company disclosed a shortfall between reported financial numbers and the current state of the books. Before the suspension, Patisserie Holdings had a market value of 446 million pounds ($590 million).
Johnson is considering making a “significant” cash injection if the company fails to secure funding, the Times reported Friday, without specifying where it got the information.
The police in Hertfordshire, England, said they had arrested a 44-year-old man on suspicion of fraud by false representation and released him under investigation. Marsh could not immediately be reached for comment.
The Financial Reporting Council, the U.K.’s accounting regulator, is “looking into this matter carefully and will give full consideration to further action as more facts become available,” according to a statement from a spokeswoman. The country’s tax authority, HM Revenue and Customs, said it doesn’t comment on identifiable taxpayers.
The company said Wednesday that it has an unpaid tax bill of 1.14 million pounds. A filing earlier this year said Patisserie Holdings had about 28.8 million pounds of cash and cash equivalents. The company, whose accounts were previously audited by Grant Thornton, declined to comment on how much cash it actually holds now.