SFO charges four individuals over Patisserie Valerie scandal
September 14th, 2023
The Serious Fraud Office (SFO) has brought fraud charges against four individuals who oversaw the collapse of high street baker chain Patisserie Valerie.
Christopher Marsh, a former director and chief financial officer of Patisserie Holdings Plc, was charged alongside his wife Louise Marsh, financial controller Pritesh Mistry and financial consultant Nileshkumar Lad.
The company abruptly ceased trading in October 2018 closing 70 shops and causing the loss of more than 900 jobs across the UK, with the SFO opening an investigation into the company, ‘Operation Venom’, just two days later.
All four suspects were charged with conspiring to inflate the cash in Patisserie Holdings’ balance sheets and annual reports from 2015 to 2018, including by providing false documentation to the company’s auditors.
During that period, the company reported holding £28 million in accounts, yet concealed £10 million in debts from its investors and creditors, the SFO said.
Patisserie Valerie was bought out of administration by private equity firm Causeway Capital in February 2019, ending months of uncertainty for the business, its employees and suppliers. It now has 50 outlets and employs 800 staff.
Lisa Osofsky, director of the SFO, said: “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.”
The defendants have been summoned to appear at Westminster Magistrates’ Court on 10th October 2023 to hear the charges against them.
In 2021, Patisserie Valerie auditors Grant Thornton LLC and David Newstead, audit engagement partner, were sanctioned by the Financial Reporting Council (FRC). Grant Thornton was fined £4 million and Newstead was fined £150,000.
Claudia Mortimore, deputy executive counsel to the FRC, said: “The audit of Patisserie Holdings Plc’s revenue and cash in particular involved missed red flags, a failure to obtain sufficient audit evidence and a failure to stand back and question information provided by management.”
She also highlighted that as a result of the FRC’s investigation, Grant Thornton has taken actions to improve its processes and to prevent a recurrence in these types of breaches.
Last Updated: 14 September 2023