Shares in cafe chain Patisserie Valerie have been suspended after “significant, and potentially fraudulent” activity was discovered within its accounts.
Patisserie Holdings said it has been notified of “accounting irregularities and therefore a potential material mis-statement of the company’s accounts”.
According to Sky News the financial hole could exceed £20 million.
The chain has a branch in the St George's Shopping Centre on Friargate in Preston. The cafe opened in October 2015, and was the first to open in Lancashire.
This is expected to have a significant impact on the company’s cash position and may lead to a “material change” in its overall financial position.
Shares in the cafe chain have now been suspended from London Stock Exchange’s junior AIM market. Finance Chief, Chris Marsh, has also been suspended from his role.
A full investigation is underway.
Patisserie Valerie, which specialises in fresh cakes and continental breakfasts, has over 200 cafes around the UK.
It also has a partnership with Sainsbury’s supermarket. Company chairman Luke Johnson, who is also the largest shareholder with a 37 per cent stake, expressed his concern at the potential impact on the company.
He said: “We are all deeply concerned about this news and the potential impact on the business.
“We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible.”
In May, the firm reported a 14.2 per cent rise in pre-tax profit for the six months ended March 31, up from £9.7 million to £11.1 million. Revenue climbed 9.1 per cent to £60.5 million, it said at the time.