The company that owns Patisserie Valerie is considering taking legal action against its auditors for their alleged failure to spot a £40m black hole in the upmarket café and cake shop operator’s finances.
Grant Thornton, which has been auditor to Patisserie Holdings since 2006, has faced questions over how it remained ignorant of what the chain described as “significant, potentially fraudulent, accounting irregularities” discovered last week. Its actions are likely to be scrutinised by the accountancy watchdog the Financial Reporting Council.
It emerged yesterday that the board, with forensic accountants from PWC, had found that overdrafts of £10m were run up on two secret facilities with Barclays and HSBC. The company revealed on Friday that, far from having the £28.8m of cash declared in May, it had net debt of £9.8m, a deficit of £38.6m.
Various of the weekend papers cover the discovery of the overdrafts and run interviews with executive chairman, Luke Johnson, who tells how the scandal at his cafe chain led to the ‘most harrowing week’ of his life.
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