Six people face arrest over £40M black hole in Patisserie Valerie’s accounts

Patisserie Valerie finance director resigns

As many as six people face arrest over the Patisserie Valerie scandal, it has been claimed today.

The high street patisserie went into administration in January, closing 72 stores and leaving 920 people jobless.

It happened three months after a £40million hole was discovered in the company’s accounts along with fraudulent cheques and emails about fabricating invoices.

One person has already been arrested and a further five are under investigation by the Serious Fraud Office, the Sunday Times reports.

Among the five allegedly being probed are three junior members of staff.

Former executive chairman Luke Johnson has assisted with the inquiry as a witness but is not a suspect, according to the newspaper.

Non executive directors Lee Gisberg and James Horler are also not being investigated.

A source says the suspected fraud involves someone counting voucher sales twice to inflate profits and failing to pay VAT bills of between £10million and £12million.

There are around 15 email accounts involved in discussing cash shortages.

The bakery was bought at the eleventh hour by Irish firm Causeway Capital this week.

Sports Direct tycoon Mike Ashley had submitted a bid for the chain, but later pulled out, complaining that he had been locked out of the process by KPMG, which is managing the administration.

Causeway Capital’s Matt Scaife said on Thursday: ‘Patisserie Valerie is a heritage brand, much loved by its loyal customers.

‘This investment should mark the end of a turbulent period for customers and suppliers alike.’

The cake firm’s parent company, Patisserie Holdings, has been grappling with the fallout of the accounting fraud since October.

Last month the firm said the extent of fraud meant it was unable to renew its bank loans with HSBC and Barclays and it did not have sufficient funding to continue trading, leaving it with no option but to appoint KPMG as administrator.

Patisserie Valerie chief executive Steve Francis said: ‘We are delighted to welcome Causeway Capital as our partners in Patisserie Valerie, ending a disruptive period of uncertainty for the business.

‘The affection and loyalty for the brand among our customers and employees, and Causeway Capital’s enthusiasm and support for the business, creates for us the foundations for an exciting future for the business. ‘