Patisserie Valerie to remain tight-lipped over extent of crisis at investor meeting
The board of Patisserie Valerie is to remain tight-lipped about the crisis that has engulfed the cake retailer.
It is three weeks since the Birmingham-based business suspended trading of its shares on the Alternative Investment Market and launched an investigation into suspected accounting irregularities.
The company is holding its general meeting at 9am to approve the issue of the conditional placing shares but said it will not be providing any new information at the meeting.
It comes as furious investors continue to demand answers as to how a £40m black hole appeared in the company’s accounts, and the discovery of two “secret” company bank overdrafts.
Chairman Luke Johnson revealed that £9.7m had been spent in two overdrafts set up with HSBC and Barclays. Johnson said neither he, the board, nor the auditors had known that the firm had bank overdraft facilities.
In a statement this morning, Patisserie Valerie said: “The company is continuing to work with its professional advisers to understand the extent of the previously announced financial misstatements and potential fraudulent activity.
“As this work is ongoing, the board is not yet in a position to advise on when the suspension to trading in the ordinary shares will be lifted. The board is also responding to enquiries from multiple regulators and authorities and the outcomes of which are expected to take some time.”
The company said that in order not to prejudice the investigations, “the company will be restricted at the general meeting from answering specific questions in relation to these events.”
Investors have been pushing for a wider review of what went wrong over concerns that an internal investigation is not sufficiently independent.
Invesco, a top ten shareholder in the Aim-listed company, has told Johnson and the board of Patisserie Holdings, the parent company, to hand over the investigation to a law firm or an independent investigation firm.
The chain was saved from collapse earlier this month after Johnson joined forces with investors to plug the firm with cash.
Johnson made £20m available in emergency funding to prevent the company’s collapse, keeping its 200 stores open while securing 2,800 jobs. Shareholders, including fund managers Schroders, Invesco Perpetual and Miton, bought in at 50p-per-share to provide £15.7m of funding.
Separately, the former chief executive of Druckers, David Scott has ruled himself out of a bid for the company.
He said: “Despite the media reports, I have not appointed nor do I intend to appoint a company to liaise with shareholders on my behalf and I have no interest in making an offer for or acquiring shares in Patisserie Valerie or any related companies.”
