Showdown at Patisserie Valerie

Luke Johnson branded arrogant in bitter row with shareholders over rescue of stricken cafe chain

PATISSeRIe Valerie boss Luke Johnson has been lambasted by angry shareholders at a crunch meeting to save the stricken cafe chain from collapse.

More than 99pc of investors in parent firm Patisserie Holdings voted in favour of a £15.7m share placing to secure its future.

But they lashed out at management accusing directors of ‘holding a gun to our heads’ in the wake of an accounting scandal that has brought the company to its knees.

At a meeting in London, Johnson was accused of not listening to the concerns of ordinary shareholders or answering their questions.

In one heated exchange with the 56year- old tycoon, shareholder Angus Forbes, a former fund manager, said: ‘Don’t talk over me sir, you are in the dock, I have the floor.’

Kristof Neys, also an individual shareholder, said of Johnson’s performance: ‘He’s quite arrogant.’

Johnson, who is executive chairman of Patisserie Holdings and its largest shareholder, said the chain was three hours away from bankruptcy when he plunged £20m into the firm last month.

He will get £10m back once the £15.7m worth of shares have been issued, with the remaining £10m on loan to the company interest-free for three years.

But investors were angered by proposals which they said will dilute the value of their own shares.

The shares will be sold for 50p each, compared with 433p before trading was suspended. Johnson told shareholders: ‘At the time we decided on this resolution we were three hours from going to bankruptcy and this was agreed to be the best solution.

‘Quite a few companies in our situation aren’t saved, they go into administration.’

In a stock exchange announcement two hours before the meeting, the group said that it would not be providing any new information.

The Serious Fraud office is investigating potential fraud at Patisserie Holdings which has seen the arrest and subsequent resignation of finance director Chris Marsh.

Stock market filings reveal that Marsh and chief executive Paul May received twice as many share options as expected, which allowed them to cash in a combined £4.6m.

Johnson refused to disclose whether it had appointed lawyers to look into the share options.

Many smaller shareholders left the meeting feeling their questions were unanswered. Heather Goddard, an individual shareholder, said: ‘I felt when Johnson came in and started the meeting saying 99pc of the votes in by proxy were in support of them, what he was saying to me was, “you don’t count.”’

She added: ‘When I asked him why there was there a gun to our head for this deadline he didn’t provide me with an answer I understood.’ Forbes, 53, added: ‘This decision is not right, it’s immoral. I have shares in a company that has been subject to fraud, bad management, and malgovernance.’

Chris Boxall, co-founder of Fundamental Asset Management, which invests in Patisserie Holdings, said: ‘We’ve got a gun to our heads – but we really want to know what’s going on.’ He added: ‘I know the bakery business well, I was an auditor of one, they’re easy to understand.

‘What I don’t understand is how we still don’t know any more than we did three weeks ago.’

Roger Lawson, another investor, said: ‘There was no good reason not to answer those questions as they could not possibly prejudice the investigations by the legal authorities.

‘This is an abuse of company law and I will be making a complaint about it.’

Johnson has been criticised for presiding over the scandal while having more than 40 directorships at other companies. He is understood to have stepped down from four board roles since the troubles emerged.

He is also chairman of the remuneration and audit committees, prompting calls for him to step down over conflict of interest.