Finance director of crisis-hit Patisserie Valerie arrested

Chris Marsh was suspended after hole was found in cafe chain’s accounts

The finance director of the stricken Patisserie Valerie has been arrested by police, the company has told the stock exchange.

Chris Marsh, who joined the company in 2006, was arrested on Thursday night and has been bailed.

Hertfordshire police, who declined to name the individual, said a 44-year-old man from St Albans, where Marsh lives, had been arrested on suspicion of fraud by false representation.

The Serious Fraud Office has confirmed it has opened a criminal investigation into an individual but said it could give no further information.

Marsh was suspended on Tuesday night when the 200-strong cafe and cake chain revealed “significant and potentially fraudulent” accounting irregularities. The business is understood to have discovered a hole in its accounts of more than £20m.

On Thursday, Patisserie Valerie, which has nearly 3,000 staff, said it would be forced to close if it did not get an “an immediate injection of capital”. The chain was unable to say if its staff would get paid this week.

Advisers from PricewaterhouseCoopers in Birmingham are understood to be standing by to handle an administration process if the company collapses. Accountants from PwC are carrying out a forensic examination of the group’s accounts as it tries to assess the scale of the accounting black hole.

The accountancy watchdog, the Financial Reporting Council, said on Friday it was “looking into this matter carefully and will give full consideration to further action as more facts become available”. The City watchdog, the Financial Conduct Authority, is also expected to examine the case.

Patisserie Valerie is chaired by the entrepreneur Luke Johnson, who holds a 37% stake. Thecompany was valued at £450m on the stock exchange before its crisis emerged.

The company’s directors have admitted it faces a winding-up order from HMRC over a £1m unpaid tax bill. The order was filed on 14 September but the directors were unaware of its existence until earlier this week. The petition is expected to be heard in court on 31 October.

Marsh sold share options in July, generating a £700,000 profit

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