Patisserie Valerie’s (LON: CAKE) finance director was arrested on Thursday.
In a statement to the London Stock Exchange on Friday, the cake chain said that Chris Marsh had been released on bail.
“The company has been made aware that Chris Marsh, who is currently suspended from his role as company finance director, was arrested by the police last night and has been released on bail. Further updates will be released in due course as appropriate,” said the group.
Marsh was suspended on Tuesday after the group uncovered “significant, and potentially fraudulent, accounting irregularities.”
Patisserie Valerie found a £200 million hole in its accounting, leading the group to say on Thursday that it was a risk of closure unless it received “an immediate injection of capital”.
The Serious Fraud Office has “opened a criminal investigation into an individual” but can “give no further information or comment at this time,” said the SFO said, without naming the individual.
Shares in the bakery retail chain were suspended on Wednesday.
The group has almost 3,000 members of staff, who risk not getting paid this week.
The HMRC has filed a winding-up petition against Patisserie Valerie’s main trading subsidiary, Stonebeach, over an unpaid £1.14 million tax bill.
“There is a whole sequence of events here where we’re talking about a listed company which until Wednesday was worth over £400 million,” said Julie Palmer, from the accounting firm Begbies Traynor.
“It is actually quite staggering that [the winding-up petition] has happened without any notification to the stock market and I believe even the board said they weren’t even aware this had been served on the company.”
Patisserie Valerie was bought by Luke Johnson, who owns a 37% stake in the group. He is the executive chairman of Patisserie Holdings, which owns brands including Baker & Spice and Flour Power City.