AIM-listed Patisserie Valerie teeters on the brink of collapse unless it can secure a significant injection of capital after 'potentially fraudulent' financial irregularities created a £20 million accounting black hole.
Today, the company announced that its Chief Financial Director, Chris Marsh, was arrested Thursday evening and subsequently released on bail.
On Wednesday, after the company announced a temporary suspension of trading it was made aware that HM Revenues and Customs (HMRC) had filed a winding up petition to liquidate the company’s assets over an unpaid £1.14 million tax bill.
'The company and its advisors are in communication with HMRC with the objective of addressing the petition,' the company said in a stock market update.
'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'.
At its half-year results, the café chain reported profits of £47.1 million up 8.75% and net cash of £28.8 million, with an interim dividend of 1.44p per share paid in July. The company’s share price stands at 429p.
After discovering potentially fraudulent accounting practices, Patisserie Holdings admitted that it has impacted the company’s cash position and overall finances.
Patisserie Holdings board of directors, led by Executive Chairman Luke Johnson who controls a 37% stake in the company, are assessing all options to keep the business afloat.