I’ll work for free, says chairman of stricken cafe chain
Patisserie Valerie boss steps down from string of jobs
PATISSERIE Valerie chairman Luke Johnson has relinquished his salary and resigned from a string of other jobs as part of his efforts to revive the troubled chain’s fortunes.
The serial entrepreneur has told the board he will not take a penny of his annual £60,000 salary for the rest of his time at the 206-outlet coffee and cakes chain which has been rocked by an accounting scandal.
He came under fire from corporate governance watchdogs earlier this year for having too many jobs.
But The Mail on Sunday has learnt that Johnson has now stood down as a director from swimming goggles maker Zoggs, West End entertainment business AKA Group, theatre company Generation of Z and Beak Street Films.
The resignations came after Johnson faced a barrage of criticism after a black hole was discovered in the accounts of Patisserie Holdings last month.
The firm said it had discovered ‘significant, and potentially fraudulent, accounting irregularities’.
It later revealed that it had a net debt of around £9.8million, having previously reported a net cash position of £29million.
Finance boss Chris Marsh was arrested by police and released on bail without charge. The Serious Fraud Office said it has ‘opened a criminal investigation into an individual,’ without identifying them.
The shares were worth £4.29 before the scandal but have since been suspended from trading on the stock market. Mark Brumby, chief executive at investment advisory firm Langton Capital, said the shares could be worth as little as 60p when they begin trading again. Other sources estimated that the financial information released by the firm could indicate a value above £1 but it is far from clear when the stock’s suspension will be lifted.
Giving up his annual salary is likely to be regarded as an effort to show contrition as much as a move to stringently cut costs.
Johnson endured a tense meeting with Patisserie Valerie shareholders in London last week, the first since it fell into crisis.
The 56-year-old addressed the issues head on, telling investors he promised ‘to focus on this job in hand for the foreseeable future’.
He said the company had been three hours from going bust when he formed a plan to save it with £20million of loans and a £15million rights issue.
However, the millionaire was given a hard time by his investors, who ultimately approved the plan. Small shareholder Angus Forbes, a former hedge fund manager who is married to Strictly Come Dancing judge Darcey Bussell, scolded Johnson when he interrupted a question, telling him: ‘Don’t talk over me, sir. You are in the dock. I have the floor.’ Another described Johnson as ‘arrogant’.
The refinancing has diluted Johnson’s stake in Patisserie Valerie from 37 per cent to 28.5 per cent.
The Mail on Sunday revealed last month that advisory groups had issued a series of warnings to investors about Johnson having too many board roles. He is also on the boards of two other listed businesses – Brighton Pier Group, which he chairs, and Elegant Hotels Group. But he is registered as a director at dozens of firms and their subsidiaries. In a newspaper column earlier this year he blasted corporate governance groups as ‘eunuchs giving sex lessons’.