The future of 200-strong cafe chain Patisserie Valerie was today hanging in the balance as it admitted the business can no longer continue trading without an immediate injection of capital.
And in a further twist to the situation this morning, the company issued a statement confirming that its finance director Chris Marsh – who was suspended earlier this week – was arrested last night and then released on bail.
The company was made aware of suspected irregularities in its accounts on Tuesday, with reports suggesting that a £20m black hole had been uncovered. Shares in the London-listed outfit were suspended immediately.
It also emerged that HMRC has filed a winding-up petition against Stonebeach Limited, the company’s principal trading subsidiary, over a £1.14m tax bill. A hearing date has been set for 31 October.
Patisserie Holdings said yesterday that after undertaking further investigation into the financial status of the company, the board has reached the conclusion that there is a material shortfall between the reported financial status and the current financial status of the business.
“Without an immediate injection of capital, the directors are of the view that that is no scope for the business to continue trading in its current form,” it stated. “As a consequence, the directors and the company’s professional advisers are assessing all options available to the business to keep it trading and will update the market in due course.”
CFO Chris Marsh was suspended from his role on Wednesday and this morning the chain published a statement revealing there had been further developments overnight.
It said: “The company has been made aware that Chris Marsh, who is currently suspended from his role as company finance director, was arrested by the police last night and has been released on bail. Further updates will be released in due course as appropriate.”
Hertfordshire Police told the BBC: “A 44-year old man from St Albans has been arrested on suspicion of fraud by false representation. He has been released under investigation.”
The first Patisserie Valerie café was opened in 1926 by Belgian born founder Madame Valerie. Its most recent UK launch came in August in Warrington.
The company said its expansion strategy was based on opening 20 new stores annually. Although it is famous for its cakes and gateaux, it also offers a full menu of hot food, including cooked breakfasts and grilled snacks.