Patisserie Valerie on the brink of collapse
Plea for cash after chain is left £30m out of pocket
‘No scope to continue’
HIGH Street cafe chain Patisserie Valerie was on the verge of collapse last night after a suspected fraud blew a £30million hole in its finances.
In a dramatic announcement, the 92-year-old cake company warned that its future was in the balance without an urgent cash injection.
Its parent company, which employs almost 3,000 across its 206 branches, has blamed ‘ potentially fraudulent’ activity for millions of pounds going missing from its accounts. Last night it was claimed the entire £28.8million the company had in the bank in May is unaccounted for.
It has now emerged that the company’s long- serving finance chief, who was suspended in the wake of the discovery on Wednesday, cashed in shares worth £5million this year.
Chris Marsh, 44, made a profit of £700,000 in a huge share sell- off three months before the financial gaps were exposed this week. And in February, he sold 666,666 shares offered as part of a company reward scheme for a profit of £1.26million. There is no suggestion that he is accused of any wrongdoing.
As the mystery into the accounting black hole deepened, the cafe’s parent company, Pattiserie Holdings, yesterday made a plea for money to save it from collapse.
Pressure for a bail out centred on majority shareholder Luke Johnson, the tycoon behind the Pizza Express chain.
If Mr Johnson, who owns 37 per cent of the business, does not step forward with funds the company could go bust as early as today. The decision hinges on whether he is willing to risk part of his £260million fortune. The company stopped trading on the London Stock Exchange when the scandal emerged on Wednesday. At the time, Mr Johnson said: ‘We are all deeply concerned about this news and the potential impact on the business.’ Executives were informed about the missing money on Tuesday, bringing in lawyers and forensic accountants who were still combing through the company’s finances last night. The Serious Fraud Office is now understood to be investigating.
The accounting flaws were followed by news that HM Revenue & Customs had also launched a bid to wind up the company’s trading arm over a £1.14million tax bill.
The ‘winding up’ petition was presented to the High Court in September but board members of Patisserie Holdings are understood to have been unaware until yesterday.
It involves Patisserie Holdings’ trading firm Stonebeach, which is run by Mr Marsh and the company’s chief executive Paul May.
Mr Marsh, who still holds a £2million stake in the company and has been a director at Patisserie Valerie since 2007, was not available for comment last night.
Patisserie Holdings said yesterday: ‘Without an immediate injection of capital, the directors are of the view that there is no scope for the business to continue trading in its current form.’