The chief executive of Patisserie Valerie has stepped down from his role on the board of The Restaurant Group (TRG) “with immediate effect,” as he strives to concentrate on helping the cakes chain bounce back from a devastating accounting scandal.
Paul May has resigned from his position at the group. TRG owns brands various brands including Garfunkel’s and Frankie & Benny’s, in the wake of the heightening pressure within his own cafe chain.
Debbie Hewitt, the chairman of the TRG, said that the firm “understood and accepted his decision” after the tumultuous week of the patisserie. The pastry chain is chaired by Luke Johnson, a serial entrepreneur, who owns 37 percent of the shares of the company.
Last week, the AIM-listed Patisserie Valerie sent shockwaves through the City following the discovery of an accounting shortfall and after the arrest of the finance director of the company. It warned regarding the discovery of “significant, and potentially fraudulent, accounting irregularities.”
Johnson agreed to contribute £20 million in loans to stop the business from collapsing and to safeguard 2800 jobs. However, an emergency share placing will possibly see the value of the group reduced from nearly £450 million to less than £70 million when the shares resume trading eventually.
Last Sunday, Johnson disclosed that the past seven days had been “the most harrowing week” of his life. He also said that he felt a “moral obligation” to save the business.
May had criticised Johnson with the “bombshell” news of the financial woes that faced the firm last week, as the news of the £20 million debt hole facing the company started to emerge.
Patisserie Valerie also disclosed that its board had become informed of a winding-up petition coming from the HMRC against Stonebeach, the principal subsidiary of the company, with the tax body attempting to seek a payment amounting to £1.1 million.