Former CFO and three others charged with fraud over collapse of Patisserie Valerie

The Serious Fraud Office has charged four people with fraud in connection to the collapse of the UK bakery chain in 2018.

The UK’s Serious Fraud Office (SFO) has brought fraud charges against four individuals, including a former director, who oversaw the financial failure of a chain of almost 200 high street bakeries.

After a five-year investigation codenamed Operation Venom, the SFO said it had charged former director and Chief Financial Officer of Patisserie Holdings Plc for 12 years, Christopher Marsh, and his wife, accountant Louise Marsh, as well as Financial Controller Pritesh Mistry and financial consultant Nileshkumar Lad. All four suspects were served with charges at their homes.

The SFO opened a full investigation in October 2018. This came two days after the company abruptly suspended trading, closing 70 stores and causing the loss of over 900 jobs across the country when its debts were revealed. 

False audit information

The SFO said all four were charged with “conspiring to inflate the cash in Patisserie Holdings’ balance sheets and annual reports from 2015 to 2018, including by providing false documentation to auditors”. During this time, whilst reporting holding £28m ($34.7m) in accounts, they are accused of having concealed Patisserie’s £10m ($12.4m) of debts from investors and creditors.

The defendants are summoned to appear at Westminster Magistrates’ Court on October 10, 2023 to hear the charges against them.

Outgoing SFO Director Lisa Osofsky, said: “Patisserie Valerie’s abrupt collapse rocked our high streets – leaving boarded-up shops, devastating job losses and significant investor losses in its wake. Today is a step forward in getting to the bottom of this scandal.”

Commenting on the news, Richard Sallybanks from BCL Solicitors said: “Given it has taken five years for charging decisions to be made in this [Patisserie Valerie] case amid general concern at the duration of SFO investigations and the well-publicised delays in the court system, it could still be several years before the individuals stand trial.”

This case brings the total number of individuals charged by the SFO this year to 10, following fraud charges against three individuals in the Ethical Forestry Ltd case, and bribery charges against three individuals in the London Mining Plc case.  

SFO criticised

There has been plenty of criticism over how long the SFO has taken to bring charges forward and issues around disclosure. And the agency does not have a strong record for winning in fraud cases. The recent high-profile case against G4S was abandoned in March 2023. This followed a 10-year investigation into the security firm’s electronic tagging arm. Critics have blamed the agency for being under-resourced and wasting the taxpayers’ money.

Nick Ephgrave QPM, a former senior Metropolitan Police chief, has been appointed to replace Lisa Osofsky as the new head of the SFO at the end of September. Ephgrave, who will be in the role for an initial term of five years, has chaired the National Police Chiefs’ Council Criminal Justice Co-ordination Committee and held roles on the Criminal Procedure Rules Committee and the Sentencing Council.