Patisserie Valerie owner's suspended finance head arrested, released on bail

The café chain’s operator was alerted this week to a financial hole that could have wiped out its entire £28.8 million cash balance

But it is now thought to be on the brink of collapse after the arrest of the company's suspended finance chief on suspicion of fraud.

Last May he said that Patisserie Valerie had "a strong balance sheet" so the problems will come as a major disappointment to him.

A further statement was expected from the company later on Friday to update investors on the hunt for new capital to shore up its finances.

It said: "The company has been made aware that Chris Marsh, who is now suspended from his role as company finance director, was arrested by the police last night and has been released on bail".

The SFO said: "Following this morning's Regulatory News Service announcement by Patisserie Holdings PLC, the SFO confirms that its director has opened a criminal investigation into an individual".

'The board has now reached the conclusion that there is a material shortfall between the reported financial status and the current financial status of the business, ' the company added.

Mr Marsh was suspended from his role while the circumstances of the financial black hole were examined internally.

Mr Johnson, a serial entrepreneur, is Patisserie Holdings' largest shareholder with a 37 per cent stake.

A sign is seen outside a branch of Patisserie Valerie in London, Britain, October 10, 2018.

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.

Landlords forfeited the leases on locations in Hammersmith and Edgware Road, citing a breach of contract.

Patisserie Holdings - which owns additional brands such as Druckers, Philpotts and Baker & Spice - trades from more than 200 stores and also has a partnership with Sainsbury's, with branded counters present in the supermarket.

A spokesperson for landlord MP Kings Retail SARL commented: "We have taken possession of the unit on King Street in question".

"Based on the current information available to them, the directors believe that upon completion of this equity and debt fundraising, the group will be able to continue trading in its current form for the foreseeable future", the company said in a statement.

Marsh was suspended on Wednesday after the high street cake shop revealed it had been notified of "significant and potentially fraudulent" accounting irregularities.

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