Patisserie Valerie’s finance director has been arrested amid a fraud inquiry, as the company scrambles to secure its future.
A number of stores were closed on Friday, hours after the upmarket baked goods chain confirmed Chris Marsh had been detained before being released on bail.
Patisserie Holdings had warned on Thursday its current business was at risk of collapse without an immediate injection of cash.
It suspended trading in its shares the previous day after the board said it was looking into “potentially fraudulent accounting irregularities” resulting in a misstatement of its financial position.
Mr Marsh was suspended from his role while the circumstances of the financial black hole were examined internally.
A story by Sky News on Tuesday suggested the sum could exceed £20m.
Hertfordshire Police said on Friday morning: “A 44-year old man from St Albans has been arrested on suspicion of fraud by false representation.
“He has been released under investigation.”
The Serious Fraud Office (SFO) also added: The SFO confirms that its director has opened a criminal investigation into an individual.
“We can give no further information or comment at this time.”
The company later said it did not have a comment to make after it emerged two stores in London, in Hammersmith and on Edgware Road, were not open for business amid the cash crunch.
A notice on the door of the Patisserie Valerie shop in Hammersmith that appeared on Twitter said the site’s landlord had taken control citing “non-payment of rents”.
A spokesman for MP Kings Retail SARL commented: “We have taken possession of the unit on King Street in question.
“We are sorry to see the store close but have been forced to act given the tenant was in breach of their lease agreement.”
In a separate development on Friday the accounting watchdog, the Financial Reporting Council, confirmed it was looking into the firm’s announcement of possible fraud.
Among the headaches for Patisserie Holdings was a disclosure this week that the board had just learned of a winding-up petition that had been filed against its main subsidiary by the taxman.
It related to more than £1.1m said to be owed to HMRC.
Patisserie Holdings has more than 200 stores – the vast majority of them under the Patisserie Valerie brand.
It employs more than 2,500 people.
A further statement was expected from the company later on Friday to update investors on the hunt for new capital to shore up its finances.
Options are said to include restaurant entrepreneur Luke Johnson, who is the chairman of Patisserie Holdings and its largest shareholder, coming up with extra money.
(c) Sky News 2018: Patisserie Valerie finance chief Marsh arrested amid fraud probe