Patisserie Valerie finance boss arrested on suspicion of fraud
The finance boss of Patisserie Valerie has been arrested on suspicion of fraud.
Chris Marsh, 44, was suspended from his role earlier this week after it was revealed the company was on the verge of collapse.
He was arrested on Thursday night on suspicion of fraud by false representation and has now been released on bail under investigation, Hertfordshire Police said.
His arrest and release has come as the chairman, Luke Johnson, has given a £20 million loan to stop it collapsing.
Patisserie Holdings said on Friday that Johnson had stumped up loans, giving it the breathing space to raise £15.7 million in a heavily discounted placing announced later in the day.
The new equity and debt injection helped save 2,500 jobs and stave off the companys collapse, after it was plunged into crisis on Wednesday, when accounting irregularities emerged and Britains tax office said it was owed £1.14 million.
The cafe chain revealed the extent of its problems on Friday when it said it needed £20 million immediately to prevent its collapse, warning that core earnings for the current financial year would likely be £12 million, 60% lower than consensus.
Mr Johnson has said it will be business as normal at the cafe chain after swooping in with the rescue package.
He added that while he was unlikely to open more stores in the near future, his huge personal commitment to the business should be enough to reassure both shareholders and employees.
We have rescued the business.
Ive never experienced anything like it in my life but weve come through it in this week – Ive obviously made a huge personal commitment, I think we have a good business with loyal staff, and I think of it now as back on stable footing..
I did it because I believe in Patisserie Valerie. I spent 12 years involved with this business, weve employed 2,800 staff and rescuing it has essentially saved those jobs and I believe it has a strong future, he said.
The company also successfully raised more than £15 million through the issue of new shares.
The money will flow into the business in the coming days, Mr Johnson explained.
Funds raised through the share placement will be used to pay back around half the money loaned by Mr Johnson, as well as to meet outstanding liabilities including a major tax bill owed to HM Revenue & Customs.
While at least two London stores were shuttered by landlords over overdue rent payments, Mr Johnson said: No stores will be taken back (by landlords).
This is not the climate where landlords want retail sites back, frankly, so Im very confident that we will be opening all our stores for business tomorrow.
Mr Johnson, a serial entrepreneur, is the largest shareholder in Patisserie Holdings, and had a 37% stake in the business ahead of the rescue deal.
The companys future was thrown into question earlier this week after it uncovered fraudulent activity around its financial accounts.
It had been feared that the company could go into administration as soon as this week, with advisers at PwC thought to be on stand-by for a collapse.