Angry Patisserie Valerie shareholders back rescue
British bakery chain Patisserie Valerie has secured shareholder approval for a vital bailout at a stormy general meeting where bosses were given a tongue-lashing for refusing to elaborate on its precarious finances.
Speaking at a meeting to sign off the £15m (€13m) rescue deal, executive chairman and serial entrepreneur Luke Johnson admitted the company was "three hours from going into bankruptcy".
The cake and coffee chain shocked investors three weeks ago, admitting a £40m black hole had opened up in its finances and warning of "significant, potentially fraudulent accounting irregularities". Mr Johnson subsequently pledged two loans totalling £20m and tapped shareholders for £15.9m - part of which needed to be put to the vote.
Finance director Chris Marsh resigned after initially being suspended and interviewed by police as part of their investigations. The UK's Serious Fraud Office has opened a criminal investigation into the potential fraud.
Referring to the rescue package, which was subsequently approved by more than 99pc of investors, one shareholder asked: "Why are you holding a gun to our heads?"
Mr Johnson claimed the rescue package "had saved 2,600 jobs" and insisted: "This was the only situation we could come up with.
"If we had not injected the capital, we would have been obliged to appoint administrators."
Investors, many of them smaller holders, demanded further details about the cash hole and whether a legal review had been launched.
The former Pizza Express boss and Channel 4 chairman said: "We cannot answer these questions.
"All will be revealed in due course ... I'm sorry, I can't," he said.
Angus Forbes, a former banker whose stake was worth around £1m, was the most vocal individual. He questioned the dilutive mechanics of the share placing - which will see new shareholders paying just 50p for stock that traded at 429.5p shortly before it was suspended.
Attacking Mr Johnson for "talking over him", he "begged" the board to reconsider the placing and replace it with a rights issue for current shareholders.
One shareholder said: "Why should the new shareholders benefit from buying shares at a discount?"
Mr Johnson said there was not time to alter the capital raise. Prior to the meeting shareholder Chris Boxall, the co-founder of Fundamental Asset Management, told the BBC's 'Today' programme: "We really want to know what's going on.
"I don't understand either how shareholders are being asked to put money up ... yet there is a total absence or lack of information."
© Daily Telegraph, London