News
Jessica Fino 10 Oct 2018 10:41am

Patisserie Valerie investigates potential accounting fraud

Patisserie Valerie has suspended its shares as well as its chief financial officer after finding “significant, and potentially fraudulent” accounting irregularities in its business

The café chain said in a statement that its CFO, chartered accountant Chris Marsh, has been suspended from his role as a result of these findings.

Marsh joined the company in July 2006. He qualified as a chartered accountant with Vantis and as a chartered tax accountant with EY.

Patisserie Holdings warned these potential irregularities have “significantly” impacted the company's cash position and “may lead to a material change in its overall financial position”.

According to reports, the accounting hole is estimated to be of around £20m.

In the meantime, it has suspended its shares from trading on AIM while conducting a full investigation.

Later this afternoon, the company revealed an unpaid tax bill of £1.14m.

Patisserie said its subsidiary Stonebeach had received a winding up petition from HMRC filed at the High Court of Justice last month. The hearing is scheduled for 31 October.

The trading update said, “The company and its advisors are in communication with HMRC with the objective of addressing the petition.

“The company continues to engage with its professional advisers to understand better the financial position of the group and will make further announcements in due course.”

Patisserie Holdings chairman Luke Johnson said, "We are all deeply concerned about this news and the potential impact on the business. We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible."

In its latest trading update released in May, the company had said its pre-tax profit was up 14% to £11.1m on the same period the previous year, while its revenues had grown 9% to £60.5m.

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