Patisserie Valerie says accounting scandal worse than thought

Daniel Fowler
January 19, 2019

This includes thousands of false entries in its ledgers, it said in a statement.

Patisserie Holdings has faced a turbulent few months, almost collapsing last autumn after a £20m black hole was discovered in its finances. Mr Johnson, the company's chairman and largest shareholder, said the company had been "three hours".

The company confirmed that RSM have been appointed auditors, but due to the fraud and attendant accounting issues it will be some time to complete a restatement of the business' accounts and prepare the audited figures to 30th September 2018.

The high street baker's forensic accountants have revealed extensive misstatement of its account involving "very significant' manipulation of the balance sheet and profit and loss accounts".

The group's chief executive, Paul May, resigned in November and was replaced by Steve Francis, a turnaround expert who previously ran pork producer Tulip.

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Patisserie Valerie shares have been suspended since the fraud was first uncovered in October.

It is understood that a number of options are being considered, however KPMG is well known for its expertise in restructuring and insolvency, particularly a procedure known as a company voluntary arrangement which enables a business to renegotiate rental agreements with landlords or close stores.

The company has also been in discussion with its bankers to extend the standstill of its bank facilities beyond 18 January.

Bakery and cafe chain Patisserie Valerie (CAKE.L) said late on Wednesday that the multimillion fraud on its books discovered past year is far more significant than first thought, involving "thousands of false entries into the Company's ledgers".

Patisserie also said it would take more time to restate its financial accounts given the "devastating" nature of the fraud.

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