Patisserie Valerie – President Valerie injects £ 20m to avoid collapse
Multi-Million Dollar President of the Valérie Bakery Pumps £ 20 Million in Baffling and Cafes in Difficulty to Prevent Collapse Due to “Fraudulent Activity” That Left business on the brink of change.
The details of the proposed emergency rescue plan were revealed a few hours after Patisserie Holdings’ CFO, which has just over 200 cafés and nearly 3,000 employees, was arrested by police at his home.
Chris Marsh, who joined the company in 2006, was arrested Thursday night and was released on bail.
Police in Hertfordshire, who refused to name this person, said a 44-year-old man from St Albans, where Marsh lives, was arrested for fraud because of false statements.
The Serious Fraud Office confirmed the opening of a criminal investigation into one person, but indicated that he could not provide any further information.
On Friday afternoon, Patisserie Holdings said it needed at least £ 20 million in new cash to avoid calling directors. She revealed that the historical statements about her finances “were poorly stated and were subject to fraudulent activity and accounting irregularities”.
The company said an initial investigation into its accounts showed that instead of having £ 28 million in the bank, as previously stated, Patisserie Holdings had a debt of almost £ 10 million.
The annual underlying earnings “could be” £ 12 million as at 19 September, compared to the £ 26 million announced last year.
The listed activity – valued at £ 450 million just four days ago – raises £ 15 million from its shareholders by issuing two tranches of new shares.
To enable the company to continue its operations until it is possible, President Luke Johnson, an entrepreneur who owns 37% of the capital of Patisserie Holdings, is investing £ 20 million in loans. Half will be interest free and the coffee chain has three years to pay it back. Half will be repaid when the ranking of the shares is completed.
Patisserie Holdings said the new funds would be used to pay immediate debts, including money owed to HMRC and its suppliers. He said he hoped to agree a “moratorium” agreement with lenders, so that they do not take any action to recover other amounts due for 12 months.
The statement warned that the previous financial statements were probably wrong and that if it found “any other finding of financial irregularity”, the losses could be larger and larger.
Marsh was suspended Tuesday night after the coffee and bakery chain revealed “significant and potentially fraudulent” accounting irregularities.
PricewaterhouseCoopers advisors in Birmingham are expected to be ready to handle an administration process if the company collapses. The channel was unable to say if its staff would be paid this week.
PwC’s accountants conduct a forensic medical examination of the group’s accounts, which attempts to accurately assess the magnitude of the accounting black hole. The company’s shares remain suspended.
An employee told the Guardian that staff had been asked to pay for cash deliveries on Friday because he was worried about getting paid. She said: “There is a big facade that says everything is fine and if you ask questions, you are immediately closed. The only thing we have been told is not to talk to customers or reporters. There are a lot of European staff and they are the most vulnerable because it is not explained to them. ”
At least two stores in London had closed Friday as a result of a share of the owners. A sign in the Hammersmith point-of-sale window indicated that the lease had been lost due to non-payment of rents. Other homeowners told the Guardian they were paid in September and a landlord advisor said his clients were “waiting and seeing” rather than taking aggressive action.
A spokesman for the pastry Valerie refused to specify the number of stores closed Friday.
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The Financial Reporting Council, the accounting oversight body, said that it “is looking into this issue closely and will take full account of the measures to be taken as new facts become available”. The city’s supervisory body, the Financial Conduct Authority, should also examine the case.
The directors of the company admitted that their main trading subsidiary was facing a HMRC liquidation petition for a £ 1 million tax bill. The petition was filed on September 14 but the directors were not aware of it until the beginning of this week. It should be heard by the court on October 31st.
Marsh sold stock options in July, generating a profit of £ 700,000.