Patisserie Valerie finance chief arrested over ‘fraud’
Chairman steps in to save chain with £20m loan
THE finance chief at beleaguered cafe chain Patisserie Valerie was in hiding last night after being arrested on suspicion of fraud.
Accountant Chris Marsh was detained on Thursday night by Hertfordshire Police working at the behest of the Serious Fraud Office.
It came as the firm’s chairman pledged £20million to keep parent company Patisserie Holdings afloat with a rescue loan package yesterday. Marsh, 44, pictured here for the first time, is thought to have been arrested soon after visiting his elderly parents in St Albans.
The married father is suspected to be behind the rotten books, including a £28.8million black hole in its bank account, that have brought the chain to its knees.
Patisserie Holdings revealed on Wednesday it had been notified of ‘potentially fraudulent accounting irregularities and therefore a potential material mis-statement of the company’s accounts’.
Company chairman Luke Johnson made the £20million loan pledge after a wind-up order was issued by the taxman. The firm also raised £15.7million through the issue of new shares.
Funds raised through the share placement are being used to pay back about half the cash loaned by Mr Johnson, as well as to meet liabilities including the £1.14million bill owed to HM Revenue & Customs. In a statement, Patisserie Holdings, which employs almost 3,000 across 206 branches, said the loans meant it could continue trading for the ‘foreseeable future’.
Yesterday, Marsh was nowhere to be seen at the smart gated community where he lives in St Albans. His four-bedroom, three-bathroom house, valued at more than £1.5million, had all its curtains drawn.
His wife, Louise, admitted she had ‘no idea when he would be back’. She said: ‘I haven’t been told anything, so I couldn’t tell you even if I wanted to.’ His father Michael, who lives two miles away, said the whole affair was ‘very strange’. He said: ‘He was sat on our sofa last night, just a couple of hours before his arrest. I still can’t get my head around it all but, on the advice of Chris’s solicitor, I can’t say anything else.’
A senior City source with personal knowledge of Marsh said: ‘He’s the least likely fraudster I can imagine.
‘He’s just a bookkeeper and the sort of person who you’d imagine would keep himself to himself.’
Marsh’s arrest was followed by the closing of some shops yesterday. Landlords for at least two branches in London cancelled their lease agreements over breach of contract. It is understood that the company has failed to pay rents.
Yesterday a staff member at a central London shop said: ‘We don’t know anything, it’s all head office, we know as much as what is in the news at the moment.’
Hertfordshire Police said: ‘A 44year-old man from St Albans has been arrested on suspicion of fraud by false representation. He has been released under investigation.’
INVESTorS in scandal-hit cake company Patisserie Valerie are set to lose nine-tenths of their money after the company’s value plunged in a rescue deal.
Parent firm Patisserie Holdings raised £16.7m by selling new shares to investors at 50p each.
Before it was rocked by fraud claims, the shares were worth 429.5p each. It means the firm’s value has plunged from almost £450m to around £67.7m in a matter of days.
Most buyers in the placing are thought to be existing investors, including executive chairman Luke johnson, who had a 37pc stake before the stock was issued.
johnson, 56, is also lending the business £10m for three years at no interest to help it survive.
He has provided another £10m of short-term finance to cover costs until the money raised by the share sale is available to spend. Sources said the rescue deal has guaranteed the future of Patisserie Valerie, meaning all stores will open today and no staff will lose their jobs.
The company was left reeling after it discovered a multi-million pound black hole in its accounts and warned fraud may have taken place. a petition had been issued by the tax man to wind the business up over an unpaid bill of £1.1m. Finance director Chris Marsh was suspended and has since been arrested.
Sources said that it had missed a deadline to pay large amounts of rent last month.
Stores in the London districts of Hammersmith and Edgware had notices placed in their windows yesterday saying they had been shut by landlords.
But both stores are due to open this morning.