FRC launches probe into Grant Thornton audit of Patisserie Holdings Plc

The investigation will be conducted under the Audit Enforcement Procedure.

Patisserie Holdings was saved from collapse when Luke Johnson, who owns 37 per cent of the company, offered up to £20 million in loans to the struggling chain.

The FRC said it has also commenced an investigation under the Accountancy Scheme into the preparation and approval of Patisserie Holdings Plc’s financial statements and other financial information by the former chief financial officer, Christopher Marsh, a member of the ICAEW.

The watchdog said that under its rules Mr Marsh would be investigated for misconduct while the investigation into Grant Thornton would cover breaches of its rules.

A spokesman for Grant Thornton confirmed it had received a letter from the FRC about the decision to start an investigation. “We will, of course, fully cooperate in this matter,” the spokesman said.

It is the first time that the focus had been put on three years of the company’s accounts.

In October the Serious Fraud Office said it had opened an investigation into an individual, assumed to be Mr Marsh.

Mr Marsh, who has not been charged, was initially suspended and resigned shortly afterwards.

Shareholders in the 206-store chain approved the rescue plan earlier this month despite complaining about the terms being offered to them.

Last week, Paul May, the chief executive of the company, which also owns Druckers, Philpotts, Baker & Spice and Flour Power City, was replaced by Stephen Francis.