Patisserie Holdings suspends financial officer over fraud probe

Mae Love
October 12, 2018

'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.

While the company's directors and professional advisers are said to be "assessing all options available to the business to keep it trading", it was revealed on Wednesday the business now owes £1.14 million to HMRC.

The high street cake shop halted trading in its shares yesterday as it announced that it had been notified of "significant and potentially fraudulent" accounting irregularities, and suspended chief financial officer Chris Marsh.

According to Sky News, the hole in the company's accounts could be "over GBP20 million".

The company, with professional advisers from accountants PwC, have spent the last 24 hours investigating the financial status of the company.

The company, which operates from over 200 stores across the United Kingdom, requested its shares be suspended from trading on AIM in London while it conducts an investigation into its "true financial position".

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Johnson, Patisserie Holdings' executive chairman and biggest shareholder, said the business was "deeply concerned" about the developments.

"We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible". Revenue climbed 9.1 per cent to £60.5 million, it said at the time.

In the six months ended March 31 of this year, Patisserie reported pretax profit of GBP11.1 million, up 14% from GBP9.7 million year-on-year.

Patisserie Holdings - which had a market value of almost £450m before shares were suspended this week - operates from more than 200 stores.

The crisis at Patisserie Holdings, which is led by leisure industry entrepreneur Luke Johnson, comes amid growing scrutiny in Britain of the way companies' books are checked, with the country's competition regulator launching a review of the audit sector on Tuesday.

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