Patisserie Valerie blames 'fraud' for chain collapse
The UK parent of the Patisserie Valerie cake-shop chain collapsed into insolvency after an accounting scandal left it unable to secure new lending or pay its debts.
Patisserie Holdings said it appointed KPMG as administrators after announcing last week that it had found thousands of false entries in its accounts.
Former Patisserie chief executive officer Paul May stepped down in November after the baking company reported a surprise deficit that led to the arrest of former finance director Chris Marsh.
"As a direct result of the significant fraud referred to in previous announcements, it has been unable to renew its bank facilities, and therefore regrettably the business does not have sufficient funding to meet its liabilities as they fall due," the company said in a statement Tuesday.
Two of the 200 strong chain's outlets are in Ireland - on Dublin's Henry Street and in Blanchardstown, Co Dublin.
Chairman Luke Johnson has extended an unsecured, interest-free loan to help pay January wages, the chain said. The same loan will assist the administrators in keeping open as many profitable stores as possible while sale proceedings get under way.
UK accountancy watchdog, the Financial Reporting Council (FRC), launched an investigation into Grant Thornton's auditing of Patisserie Valerie back in November.
Meanwhile and separately, FRC yesterday said it had opened a second investigation into KPMG's auditing of collapsed construction firm Carillion. The watchdog said that KPMG "self-reported" additional material related to the UK company's audit for year-end 2016.
The audit was one of 160 company audits in the FRC's routine annual quality review.
KPMG said yesterday it was reviewing its response to the FRC's quality review of Carillion's 2016 audit after concerns were identified in connection with a small number of documents provided to the FRC.
The watchdog said last year that it was investigating KPMG's audits of Carillion for 2014-2017 and the conduct of two former finance directors, Richard Adam and Zafar Khan.