Patisserie Valerie’s finance director, who was suspended by the UK cake chain after it discovered an almost £40m hole in its finances earlier this month, has resigned.
On Friday the company said it had “now accepted . . . with immediate effect” the resignation of Chris Marsh, who had been a director at the group since 2007.
Mr Marsh, 44, was suspended after the board found “significant, and potentially fraudulent” accounting irregularities at the group. He was subsequently arrested and released on bail without charges, while the Serious Fraud Office confirmed earlier this month it had opened a criminal investigation into an individual.
Since Patisserie Valerie revealed it was investigating a potential “material misstatement” of its accounts on October 10, there has been a steady drip of questions about its financing practices.
The chain had almost £10m in unreported loans, it has emerged, after it found two separate bank credit lines had been used without the board’s knowledge. It has also disclosed a net debt position of £9.8m, rather than the £28m of net cash stated when it announced half-year results in May, and said it faced a winding-up petition over an unpaid tax bill of which the board was unaware.
The attempt to shut down the company by the tax authorities now been resolved through the courts, and its immediate financial future secured. High-profile chairman Luke Johnson committed up to £20m in cash and loans to keep it afloat in an emergency financing deal a fortnight ago.
New irregularities have since come to light, however, that have raised new questions about the role of Mr Johnson and his oversight.
On Wednesday, the chain revealed it had awarded millions of pounds of share bonuses to its two most senior executives without notifying shareholders. Half of the undisclosed awards were exercised by the chief executive, Paul May, and Mr Marsh only three months before it suspended its shares after discovering the accounting irregularities.
The awards relate to the company’s 2014 long-term incentive plan, but only the first of three tranches had been made public. Mr Johnson has been head of the remuneration committee, which sets pay, since the company listed in 2014.
Patisserie Valerie said on Friday it “[reserved] its position in respect of any potential claims it may have against [Mr Marsh].”