• Tuesday, July 23, 2024

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British Indians among four charged over Patisserie Valerie collapse: report

The company, which ran almost 200 high street cafes, collapsed in early 2019

Patisserie Valerie collapsed into administration in 2019 after a £40-million hole was found in its finances. (Photo by DANIEL LEAL/AFP via Getty Images)

By: Pramod Thomas

FOUR people including two British Indians have been charged by Serious Fraud Office (SFO) over the collapse of the Patisserie Valerie bakery chain, Sky News reported.

The company, known for its nearly 200 high street cafes across the UK, faced financial turmoil in early 2019 following reports of a multimillion-pound deficit in its finances, attributed to alleged ‘potentially fraudulent’ accounting irregularities.

The SFO has taken legal action against Christopher Marsh, the former director and chief financial officer of the chain, who worked at the company for 12 years. Louise Marsh, an accountant and Marsh’s spouse, has also faced charges, along with Pritesh Mistry, the financial controller, and Nileshkumar Lad, a financial consultant.

All four were personally served with the charges at their residences, the report said.

Patisserie Valerie abruptly ceased trading in October 2018, leading to the immediate closure of 70 stores and the loss of 900 jobs nationwide, as a result of reported financial irregularities. The SFO initiated a comprehensive investigation into the matter, code-named ‘Operation Venom’.

The charges brought against the four pertain to allegations of conspiring to inflate cash on the balance sheets and annual reports of Patisserie Holdings, the owner of the chain, between 2015 and 2018. This allegedly included the provision of falsified documentation to the company’s auditors.

A court appearance for all four defendants has been scheduled for October 10 at Westminster Magistrates’ Court to hear the charges.

“Patisserie Valerie’s abrupt collapse rocked our high streets – leaving boarded-up shops, devastating job losses and significant investor losses in its wake … Today is a step forward in getting to the bottom of this scandal,” SFO director Lisa Osofsky is reported to have said.

Founded by Belgian Madame Valerie in the 1920s, the bakery chain had a 92-year history before entering administration in January 2019. The chain was chaired by entrepreneur Luke Johnson, who emphasised that there is no allegation of wrongdoing on his part.

Nevertheless, the collapse of the company led to substantial losses for shareholders, including Johnson, who held a 37 per cent stake when the company was valued at £450 million before its collapse.

Following the crisis, Grant Thornton, the auditor of its parent company, Patisserie Holdings, faced a £2.3m fine and was criticised for a ‘serious lack of competence’ in its role during the accounting scandal.

It has been the firm’s auditor from 2007 until the company’s collapse.

Patisserie Valerie was rescued from closure in 2019 through a management buyout supported by Irish private equity firm Causeway Capital Partners.

The chain continues to operate several dozen cafes across the UK, and Patisserie Valerie products are available at select Sainsbury’s stores.

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