Court papers detail Grant Thornton’s alleged errors in Patisserie Valerie audits
FRP Advisory has reportedly filed legal documents detailing Grant Thornton’s alleged errors in its auditing of Patisserie Valerie after launching a £225m court claim against the professional services firm.
FRP Advisory, liquidator to the cafe chain, said the auditor’s negligence meant Patisserie Valerie bosses were unaware the firm had run out of funds.
It alleges that Grant Thornton failed to uncover undisclosed overdrafts and accounts.
Legal documents accuse the firm of failing to ask why Patisserie Valerie received such little interest on its bank accounts, according to the Sunday Times.
The newspaper reported that the cafe group earned £44,000 interest on a reported bank balance of £22.5m, an interest rate of just 0.2 per cent.
Credit card charges also fell from £502,525 to £355,899 within three years, despite the company supposedly growing, which FRP alleges Grant Thornton failed to question.
City PM has contacted Grant Thornton and FRP for comment.
Patisserie Valerie collapsed into administration in January 2019 following the shock revelation of “significant fraud” at the company and the discovery of a £40m hole in its finances.
However, KPMG, which was originally appointed as liquidator, later announced that the missing money actually totalled £94m.
FRP replaced KPMG after the Big Four firm said it could not investigate Grant Thornton due to a conflict of interest.
At the time, FRP said it would explore legal claims in an attempt to return money to investors who lost funds when the business collapsed.
KPMG had previously said “there may be sufficient grounds to establish potential legal claims against a number of parties.
“These parties may include Grant Thornton, who were the auditors to the Patisserie Valerie Group.”
However, KPMG added that it could not probe the situation itself because “Grant Thornton are also auditors to KPMG”.