The company released a statement in the stock exchange saying the chartered accountant, who has been at the firm for the last 12 years, was arrested by police last night and has since been released on bail.
Chris Marsh is a 44-year-old chartered accountant, who qualified with Vantis, as well as a chartered tax accountant with EY. He was suspended yesterday.
The café chain said earlier this week it had suspended its shares after finding the accounting irregularities.
It later revealed that its main subsidiary, Stonebeach, was the subject of a £1.14m winding-up petition from HMRC which had been filed at the High Court on 14 September. The hearing is scheduled for 31 October.
In an update yesterday, the company said that after further investigation into its finances, it had reached the conclusion “that there is a material shortfall between the reported financial status and the current financial status of the business”.
“As a consequence,” the statement continued, “the directors are of the view that there is no scope of the business to continue trading in its current form.”
It is believed the Financial Reporting Council is set to investigate the accounting fraud as, although the regulator would not be drawn on the matter, its public interest remit makes it inevitable that its enforcement arm will take on the case.