Advertisement

Patisserie Valerie chief executive resigns as fraud probe continues

The chief executive of the owner of Patisserie Valerie has resigned a month after a fraud inquiry began into a multi-million pound black hole in its finances.

Paul May, Patisserie Holdings (LSE: CAKE.L - news) said, had quit with immediate effect and been replaced with Steve Francis - an executive with a "proven track record of rapid operational performance improvements".

The company's statement was unusual in that it offered no word of thanks or tribute to his work following Mr May's 12-year tenure.

But sources told Sky News that Mr May - a long-time business partner of the company's chairman Luke Johnson - had made the decision to go and was not forced out.

The statement said: "Since 2005, Steve has completed four successful operational turnarounds of multi-site, international businesses with revenues ranging from £2bn to £200m.

"Steve was recently CEO of Tulip Ltd, the UK's largest integrated farmer and producer of pork, where he led the rapid return from significant losses, rebuilt the management team and completed a major growth acquisition."

Following a further list of his achievements, Mr Johnson said: "I am delighted to welcome Steve Francis as new CEO at Patisserie Holdings PLC.

"He has a strong track record of restoring value in turnaround situations, especially in the food industry, and the board looks forward to working with him in the revival of the business."

Mr Johnson had told shareholders just two weeks ago that the company was "three hours" from bankruptcy as it rushed to fill a gap in its accounts.

He added that he and Mr May were reducing other work commitments to concentrate on the chain's recovery full-time.

The entrepreneur provided £20m in new loans to keep the business going as the Serious Fraud Office continued to investigate the circumstances of the cash crunch.

The company's finance director at the time, Chris Marsh, was arrested on suspicion of fraud and released last month.

Shares (Berlin: DI6.BE - news) in Patisserie Holdings, which employs almost 2,500 staff at 200 shops, remain suspended.