Type to search

SFO arrests over Patisserie Valerie accounting fraud


SFO arrests over Patisserie Valerie accounting fraud


The arrests occurred last week in a joint operation with the police and are part of investigations right into a £40m accounting fraud at Patisserie Valerie.

Patisserie Valerie accounting

In a declaration, the SFO stated: ‘On Tuesday 18 June, as a part of a joint operation with Hertfordshire, Leicestershire and the Metropolitan Police Services, five individuals had been arrested and interviewed in connection with the Serious Fraud Office investigation into people associated with Patisserie Holdings PLC.’

The arrests are the state-of-the-art section within the fallout from the fall apart of Patisserie Valerie. Last October, KPMG turned into hired to behavior forensic research after the company collapsed and observed ‘devastating’ fraud and planned manipulation of the bills.

‘The work finished using the agency’s forensic accountants because then has discovered that the misstatement of its bills become widespread, concerning massive manipulation of the stability sheet and income and loss accounts,’ figure organization Patisserie Holdings said in an announcement at the time.

‘Among different manipulations, this worried heaps of false entries into the employer’s ledgers. It will take some time before a reliable trading outlook can be completed while the above painting streams progress.’

The assertion said the initial indicators from work accomplished up to now changed into that the coins waft and profitability of the commercial enterprise had been overstated and become materially underneath that announced within the trading update on 12 October 2018, immediately after the employer first recognized troubles, which became based totally on restricted paintings completed over a 48-hour length.

At the time, Patisserie Valerie suggested £120m in revenue for the yr and earnings of £12m. Former agency auditor Grant Thornton become sacked while the fraud changed into observed and is beneath investigation using the Financial Reporting Council (FRC), which is investigating the mid-tier firm’s audit of the monetary statements of Patisserie Holdings for the years ended 30 September 2015, 2016 and 2017 beneath its audit enforcement system.

The regulator is also accomplishing research beneath the accountancy scheme into Patisserie Valerie’s former leader economic officer (CFO), Chris Marsh, over the education and approval of Patisserie Holdings Plc’s financial statements and other economic data supplied through Marsh.

Patisserie Valerie went into administration in January amid claims about lacking invoices and a £40m accounting fraud, which came to light closing October. Administrators at KPMG right now closed 70 stores and concessions earlier than it secured a sale into personal fairness.

In February, Irish non-public fairness firm Causeway Capital Partners stepped in to rescue the corporation and acquired ninety-six shops. All workforce individuals across Patisserie, Valerie, and Philpott’s chains have been transferred to the consumer with an on-the-spot effect. The Dublin-primarily based fund currently owns some cafes inside its portfolio, together with BB Bakers & Baristas, which controls 65 shops inside the UK and Ireland. Forensic accountants do now not contest in instances. They act as fact-finding gadgets; attempt try to are trying to find the actual truth from the hidden facts. They behavior their work in an independent and goal manner. They want criminal information, information, schooling, and enjoy to carry out their work in a powerful and actual way. Extensive know-how in commerce, felony, accounting as nicely an investigative combo of mind is wanted to perform the job correctly. Expertise in litigation support and testimony in courts of regulation also are stipulations of the forensic accountants. This is because their work might usually be used in a court docket of law. The valuation of damages due to crook and civil incorrect-doings needs to be executed with perfection. Because of this, the expertise of the commercial enterprise valuation principle is the most vital.

Eula Boone

I have written professionally since 2010 and have been an investor since 2015. My finance blog, economydiva.com, is one of the most visited blogs in the world, with more than 3 million readers a month. I love sharing what I know about investing, saving, and managing money and providing practical tips on how to be a smart and savvy money manager.