The owner of Patisserie Valerie has suspended trading in its shares “pending clarification of the company’s financial position” amid an inquiry into potential fraud.
The announcement on Wednesday morning followed a story by Sky News hours earlier that Patisserie Holdings was investigating a multimillion-pound hole in its accounts that could exceed £20m.
In a later statement, the company disclosed that it had just become aware of a winding-up petition that had been filed against is main subsidiary, Stonebeach, relating to £1.14m owed to the UK tax office, HM Revenue and Customs.
It said it was in touch with HMRC “with the objective of addressing the petition”.
The company revealed in an earlier statement that on Tuesday the board had “been notified of significant, and potentially fraudulent, accounting irregularities and therefore a potential material misstatement of the company’s accounts”.
It added: “This has significantly impacted the company’s cash position and may lead to a material change in its overall financial position.
“As a result the company has requested that its shares be suspended from trading on AIM while it conducts a full investigation with its legal and professional advisers into its true financial position.
“In the meantime Chris Marsh, the chief financial officer, has been suspended from his role.
The situation creates a huge headache for Luke Johnson, one of Britain’s best-known and most successful entrepreneurs, who is Patisserie Holdings’ executive chairman and largest shareholder.
He bought a 70% stake in the business in 2006 and his current 37% holding was worth approximately £200m ahead of the suspension in trading.
Mr Johnson is a serial entrepreneur who has enjoyed huge success with restaurant chains including Pizza Express – and this year, he has tried to engineer takeovers of others such as Gaucho, which collapsed into administration during the summer.
He said of the company’s inquiry: “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.”
Patisserie Holdings, run by chief executive Paul May, last reported group revenue in the half-year to 31 March of £60.5m – a rise of 9.1%.
Pre-tax profits came in at £11.1m, an increase of 14%.
Patisserie Holdings trades from more than 200 stores.
From – SkyNews
