The Times 15/10/18

Patisserie Valerie could sue auditor over £40m hole. Patisserie ‘fraud’ puts pressure on Grant Thornton. Grant Thornton, which has been auditor to Patisserie Holdings (CAKE) 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 £10 million were run up on two secret facilities with Barclays and HSBC. The company revealed on Friday that, far from having the £28.8 million of cash declared in May, it had net debt of £9.8 million, a deficit of £38.6 million. Speculation over the potential legal action, which could be backed by investors, came as Luke Johnson, the executive chairman and 37% shareholder, promised to scale back his other commitments to focus on restoring Patisserie Holdings.