In a story published today, the newspaper claims that Invesco, one of the company’s top-ten shareholders, has told chairman Luke Johnson and the Patisserie Holdings board to hand the investigation over to an independent body or law firm.
A source familiar with the situation told The Times that Invesco is concerned that the internal review is “not sufficiently independent”.
“Shareholders are concerned the board has given itself supervision of the investigation into [its] own conduct and potential incompetence,” a person close to Invesco has reportedly said.
According to The Times, Invesco has also been in talks with the Investor Forum about its concerns and could explore legal action to force the board to take control of the investigation.
Directors of Patisserie Valerie launched an investigation into “significant, potentially fraudulent accounting irregularities” on October 10 after the discovery of a black hole in its finances. The company told investors at the time that investigations could last “for months” and that the directors cannot predict with any certainty the outcome of those investigations.
The chain has released a revised forecast of its sales and earnings for the year to next September, citing underlying earnings of £12 million and revenues of £12 million, as opposed to the £31 million and £136 million quoted before the discovery of the hole in the accounts.
Grant Thornton has audited Patisserie Valerie’s accounts for the past eight years, and the difference between the quoted and actual financial position of the company has raised questions about the legitimacy of its audits.
The Patisserie Holdings group also owns the Philpotts, Baker & Spice, Flour Power City Bakery and Druckers – Vienna Patisserie brands. It employs over 2,500 people, according to accounts filed in February.
It has also revealed that it had “become aware” of a winding up petition relating to a £1.14m tax bill from Stonebeach Limited, its principal trading subsidiary.