The bakery chain, Patisserie Valerie has gone into administration after chairman, Luke Johnson failed to convince HSBC and Barclays to extend their banking facilities.
Patisserie Holdings said in a statement, “Patisserie Holdings Plc announces today that, as a direct result of the significant fraud referred to in previous announcements, it has been unable to renew its bank facilities, and therefore regrettably the business does not have sufficient funding to meet its liabilities as they fall due.”
Tuesday the company had no option but to appoint KPMG as their administrator, Johnson extended his interest free loan to ensure all January staff wages were paid.
“This loan will also assist the administrators in trading as many profitable stores as possible while a sale process is undertaken.”
Patisserie Holdings trading shares were suspended in October 2018 after “potentially fraudulent” accounting had been flagged. Patisserie Valerie’s former finance director Chris Marsh was arrested by Hertfordshire police, he was then released pending further investigations. The Serious Fraud Office has since started a criminal investigation.
Last Tuesday Patisserie Holdings said, “The work carried out by the company’s forensic accountants since October has revealed that the misstatement of its accounts was extensive, involving very significant manipulation of the balance sheet and profit and loss accounts.
“Among other manipulations, this involved thousands of false entries into the company’s ledgers.
“It will take some time before a reliable trading outlook can be completed while the above work streams progress.
“The initial indications from the work carried out to date is that the cashflow and profitability of the business has been overstated in the past and is materially below that announced in the trading update on 12 October 2018, which was based on limited work carried out over a 48-hour period.”