Patisserie Valerie FD arrested as questions are raised over Grant Thornton audits

The cafe chain is fighting for survival after revealing on Wednesday “significant, and potentially fraudulent, accounting irregularities”.

Mr Marsh had been suspended when these problems were discovered.

The Serious Fraud Office said it had “opened a criminal investigation into an individual”.

“We can give no further information or comment at this time,” the SFO said without naming the individual.

On Thursday, Patisserie Holdings - the owner of the cafe chain - said it needed “an immediate injection of capital” to continue trading in its current form.

In a brief announcement to the stock market on Friday, the firm said: “The company has been made aware that Chris Marsh, who is currently suspended from his role as company finance director, was arrested by the police last night and has been released on bail. Further updates will be released in due course as appropriate”.

Hertfordshire Police said: “A 44-year old man from St Albans has been arrested on suspicion of fraud by false representation. He has been released under investigation.”

Meanwhile, the ongoing events at Patisserie Holdings has raised awkward questions for its auditor Grant Thornton, which signed off the bakery chain’s latest financial report with a clean bill of health.

Grant Thornton last audited Patisserie Holdings’ accounts at the end of last year and has not yet audited this year’s numbers.

A spokeswoman for the firm declined to comment telling The Times newspaper she was bound by “our duty of client confidentiality”.

And Gavin Pearson, forensic accountant at Quantuma, the professional services firm urged caution before making accusations. He said: “For all we know now someone could have caused the problem the day after the last audit report was signed off and so the auditors wouldn’t be held responsible.”

Grant Thornton was paid £230,000 for its audits of the company across 2016 and last year. It could be asked to provide information to consultants at PwC, the accounting giant, which has been approached by Patisserie Holdings’ board to review its books.

Since Thursday’s statement, Patisserie Holdings, which is 37 per cent-owned by entrepreneur Luke Johnson, has not provided any more detail on its attempts to raise funds.

Patisserie Valerie’s stores, of which 14 are in Scotland, are continuing to operate.

In its most recent results statement in May, the company said it had cash reserves of £28.8m but it it is also understood that Mr Johnson is not in a position to personally provide the cash needed immediately.

Mr Johnson is the executive chairman of Patisserie Holdings which owns Patisserie Valerie, Druckers, Philpotts, Baker & Spice and Flour Power City.

The accountancy watchdog, the Financial Reporting Council, said: “We are looking into this matter carefully and will give full consideration to further action as more facts become available.”

Shares in Patisserie Holdings were suspended on Wednesday and a further update is expected later on today or tomorrow.