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Crisis-hit Patisserie Valerie could close its cafes over ‘accounting irregularities’

Café chain Patisserie Valerie is under threat after it has been revealed the company has potentially large unpaid taxes and signs of fraudulent accounting, and is now facing a winding up petition from the HMRC.

Patisserie Valerie, known for it's cakes and coffee, has cafés on Fitzroy Street and Bridge Street in Cambridge, as well as another at the Cambridge motorway services on the A14 near Boxworth.

All these branches could potentially close after unpaid taxes and fraudulent accounting irregularities were unearthed, which has meant the company has had to suspend it's chief financial advisor Chris Marsh.

Investors have reportedly been left shocked after parent firm Patisserie Holdings suddenly announced it had been notified of "significant, and potentially fraudulent, accounting irregularities and therefore a potential material mis-statement of the company's accounts."

In a stock market update issued on Wednesday afternoon, Patisserie Holdings said it has received a winding up petition for its principal trading unit Stonebeach.

Patisserie Valerie on Fitzroy Street (Image: Cambridge News)

It relates to £1.14 million owed to HMRC and was filed at the High Court of Justice, Companies Court, first reported by Bristol Live.

The winding up hearing is scheduled for October 31 and Patisserie Holdings said it is in communication with HMRC as it scrambles to "understand better the financial position of the group."

It caps a dramatic day for the firm, which earlier saw its shares suspended following the discovery of an accounting black hole.

This has significantly affected the company's cash position and may lead to a "material change" in its overall financial position.

Patisserie Valerie on Bridge Street is under threat because of the company's financial difficulties (Image: Cambridge News)

Patisserie asked that its shares be suspended from trading on the London Stock Exchange's junior AIM market while it carries out a full investigation into its true financial position.

In addition, finance chief Chris Marsh has been suspended from his role and accountancy giant PwC has been drafted in to look through the company's books.

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Food and Drink

Chairman Luke Johnson said: "We are all deeply concerned about this news and the potential impact on the business. We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible."

Mr Johnson, a serial entrepreneur, is Patisserie Holdings' largest shareholder with a 37% stake.

In May, the firm reported a 14.2% rise in pre-tax profit for the six months ended March 31, up from £9.7 million to £11.1 million.

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Revenue climbed 9.1% to £60.5 million, it said at the time.

Patisserie Valerie trades from more than 200 stores and also has a partnership with Sainsbury's, with branded counters present in the supermarket.

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