EDDC’s current external auditors face probe over Patisserie Valerie

“The auditor of crisis-hit cafe chain Patisserie Valerie is facing an investigation by the industry watchdog.

Work by Grant Thornton has been called into question after bosses at Patisserie discovered a £28.8million black hole in the accounts, an unpaid tax bill and two ‘secret’ overdrafts totalling nearly £10million.

The auditor has worked for the company since 2006 and most recently signed off the books for the year to September 30, which said the balance sheet was strong and contained no borrowing.

… The Serious Fraud Office is already understood to be investigating and last night the Financial Reporting Council (FRC) confirmed it was reviewing the situation.

An FRC spokesman said: ‘We are looking into this matter carefully and will give full consideration to further action as more facts become available.’

… overdrafts with HSBC and Barclays had been run up by the company totalling £9.7million but directors only learned of them on Tuesday.

Likewise, around £28.8million that had previously been in the bank was unaccounted for and they learned tax officials were seeking to have the company wound up over unpaid bills.

… Grant Thornton declined to comment last night.”

… Cliff Weight, director of investor group Sharesoc, said: ‘I find it absolutely extraordinary that a company with revenues of £114million could ever lose track of £20million.’