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Danny McCance 30 Jan 2019 05:06pm

Patisserie Valerie accounts unreliable from 2014

The troubled café chain’s accounts contain unreliable information dating back to 2014

Parties interested in acquiring the chain have been told that financial information, including sales and profit data since 2014, should not be relied on, according to the Guardian.

Potential buyers have until Friday to put forward first-round bids; however, administrator KPMG has only provided information from October 2018 and from before September 2014.

Big Four firm KPMG was appointed as the lead administrator for Patisserie Valerie after the company went into administration last week.

 A week previously, the firm had been tasked with advising Patisserie Valerie on its options after the accounting irregularities that brought the company to the brink of collapse in October were found to be even worse than previously thought.

The appointment was not well received by some shareholders who pointed to the “cosy relationships” between the company and the audit firm.

Meanwhile, more than 30 shareholders and wealth managers are looking to launch a group action against Patisserie Valerie, as originally reported by the Financial Times.

“[The case] is going to be focused on inaccurate information given either in simple terms, I suppose, in RNS announcements that have been made or annually, going back to the IPO admission document back in 2014,” Philip Rubens, partner at Teacher Stern, the law firm undertaking the group action, said.

“That will have to be scrutinised extensively,” he added.

Rubens confirmed that he will look to obtain a report from KPMG that was written by PwC on the situation in the run-up to Patisserie Valerie’s collapse.

He is hoping that the PwC report will disclose “serious and fundamental failing by the company and its directors in substantial detail, potentially going back a number of years”.

However, he added that without having seen the report he couldn’t say any more.

The case could also join Patisserie Valerie’s former auditor, Grant Thornton, as a defendant. Rubens said that he was not prepared to rule anything out at this stage.

Grant Thornton was grilled by MPs in October over the accounting irregularities.

Following the discovery of the accounting irregularities in March, the then-CFO Chris Marsh was suspended from his role and later resigned. He was also arrested and released on bail.

KPMG declined to comment.

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