Luke Johnson: Patisserie Holdings' secret overdrafts a 'nightmare'

The hospitality entrepreneur told The Sunday Times​​​ the group was thrown in to turmoil when it found £9.7m had been withdrawn from two company overdrafts set up with HSBC and Barclays without the board’s knowledge.

Patisserie Holdings’ finance director was arrested and bailed last week after the group uncovered “potentially fraudulent accounting irregularities”.

The Serious Fraud Office has confirmed it has begun a criminal investigation.

Johnson said he had been “determined” not to let the group, which employs 2,800 people, go in to administration.

On Friday he agreed to provide loans​​ of up to £20m to save the business.

The company said it has raised a further £15m by issuing new shares.

The discounted sale of shares will cut the company’s valuation from £446m to £68m, according to The Sunday Times.​

“I didn’t even know there were bank overdraft facilities,” Johnson told the paper. “And the banks were as shocked by things as we, the board were, as I’m sure are the auditors.

“At certain points in the week I was thinking, ‘I cant carry on with this’, but I don’t feel like that this evening. I think we are coming out the other side.”