Patisserie Valerie hit by bonus row
The financial watchdog is under pressure to launch an investigation into the parent company of Patisserie Valerie as the scandal engulfing the cafe chain deepens.
Stock market filings have revealed two directors received twice as many share options as expected, based on a bonus scheme in its annual accounts.
Shareholders and MPs have now urged the Financial Conduct Authority (FCA) to launch a full probe.
According to the filings, suspended finance director Chris Marsh ( pictured
right) cashed in £2m this year from the award and sale of shares.
Marsh was arrested on suspicion of fraud and released on bail earlier this month after a surprise £40m black hole was discovered in the firm’s accounts.
Meanwhile, Patisserie Valerie’s chief executive Paul May made a £2.6m profit.
The company is to investigate why the grant of share options to the two directors was not disclosed in its financial statements.
But MPs and shareholder groups called for an independent inquiry. Liberal Democrat leader and former business secretary Sir Vince Cable said: ‘The whole affair smells to high heaven. It’s important for the integrity of British business that the FCA investigates carefully to establish whether there has been serious misconduct.’ Mark Bentley, director of shareholder action group Sharesoc, said: ‘It’s very concerning indeed and this definitely needs an investigation by the FCA to find out whether they were in possession of inside information at the time they made those option exercises and sold.
‘If they were, that’s potentially a criminal offence.’
Chris Boxall, co-founder of Fundamental Asset Management, which invests in Patisserie holdings, added: ‘It’s pretty staggering that it was missed. It’s got to be the subject of some sort of investigation by the FCA.
‘how many more issues are they going to uncover?’
Patisserie holdings’ chairman Luke Johnson, 56, who owns more than a third of the business, stepped in with a rescue deal after the scandal pushed the firm to the brink of collapse.
A £20m investment secured the future of 2,800 staff and 206 cafes. But the entrepreneur, who is listed as having 40 director roles, has come under fire for seemingly taking his eye off the ball.
Boxall added: ‘It now seems clear that Mr Johnson needs to have more focus in his business interests and extract himself from a number of executive and nonexecutive roles for his own financial wellbeing and that of his fellow shareholders.
‘We are absolutely staggered how a profitable business of this nature could have collapsed so dramatically and suddenly.’
Last night the group escaped a court order by hMRC to shut the business down over an unpaid tax bill of more than £1m when the claim was thrown out by the high Court.
The FCA and Patisserie Valerie declined to comment.