Five people have been arrested and questioned by the Serious Fraud Office in relation to alleged fraud at Patisserie Valerie.
The arrests were made last week in a joint operation and follow the arrest and subsequent bailing of the bakery’s former finance director, Chris Marsh, last October. In a statement the Serious Fraud Office said: “On Tuesday 18 June, as part of a joint operation with Hertfordshire, Leicestershire and the Metropolitan Police Services, five individuals were arrested and interviewed in connection with the Serious Fraud Office investigation into individuals associated with Patisserie Holdings PLC.”
“Significant, and potentially fraudulent, accounting irregularities”, had been alleged at parent company Patisserie Holdings in October 2018. The chain fell into administration in January 2019 after rescue talks with banks failed, resulting in the closure of 71 stores and 920 redundancies.
The chain released a statement saying that it did not have enough money to meet its debts. The biggest shareholder and chairman, entrepreneur Luke Johnson, had been in talks to extend a cash lifeline from HSBC and Barclays. Mr Johnson personally extended an unsecured, interest-free loan of £3 million to help ensure that the January wages were paid to all staff working in the business. Patisserie Valerie was later sold to Ireland-based Causeway Capital Partners.
The Sunday Times, which broke the story, reported that former chairman Luke Johnson and non-executive directors Lee Ginsberg and James Horler were not among those arrested.
A separate investigation into the firm’s auditor, Grant Thornton, led by the Financial Reporting Council, is also ongoing.