Wednesday 24 October 2018 9:08 am | Updated: Tuesday 21 May 2019 4:21 pm

Patisserie Valerie survives HMRC’s winding up petition as it looks into share option accounting irregularities

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A winding up petition against debt-ridden cake shop Patisserie Valerie has been dismissed, the company confirmed today.

HMRC had sought to liquidate the scandal-hit firm over unpaid tax of £1.14m by seeking the order against parent company Patisserie Holdings' principal trading subsidiary, Stonebeach Limited, yesterday.

However, the High Court of Justice, Business and Property Courts dismissed the request, Patisserie told investors today.

The Aim-listed firm, which trades under the ticker CAKE, has frozen its shares while it investigates possible fraud that it discovered earlier this month.

It also suspended finance director Chris Marsh, who was arrested and bailed without charge by police as the Serious Fraud Office probes the company's accounts, alongside an independent review by Pricewaterhouse Coopers.

The company has a £40m black hole in its accounts, with accounting discrepancies showing it to be less profitable than previous reports have suggested.

Chairman Luke Johnson plugged the gap with loans amounting to £20m, while the cake shop raised £15m through the issue of 30m ordinary shares at knock-down prices.

This morning it also revealed that 666,666 shares granted to Marsh and 1m granted to chief executive Paul May in 2016 "are now considered by the company as being unlikely to become exercisable under the rules of the LTIP [long term incentive plan]."

Two identical option grants in 2014 and 2015, exercised by May and Marsh in February 2018 and July 2018 respectively, were not correctly accounted for in Patisserie's financial filings.

"As part of the ongoing investigation, [Patisserie] is seeking to understand why the grant of options relating to 2015 and 2016 have not been appropriately disclosed and accounted for in its financial statements," the firm said.