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So Luke Johnson and Paul May own the Tunbridge Wells freehold and they did not declare this in the accounts. Another example of these 2 directors finding ways of taking cash out of the business with total disregard for the fact that this was a listed company. Pay your staff minimum wage and take out as much cash as possible in as many ways as possible. Unfortunately for them they pushed it too far and brought the whole thing down
They also say that the company refused to share the PWC report with the banks. I wonder what was in it?
Sorry Chit
Not so! - Cursory checks ! If so never put a penny but under the mattress.
Even worse - it seems Johnson owned property/ies let to CAKE. - again not disclosed.
Related party?? Signed off by Johnson = What a scam = CVR another example!!
Bobsto
Coy must have had internal auditors (IA) to provide management with some assurance as to systems of internal control and evidence of stock levels and wastage - IA must have been able to provide the external auditors with assurance as to the reliability of the figures. If not LJ go to jail.
Amazing that the CEO of GT said he had no auditor knowledge before the HOC committee. Why employ GT?
Actually that's a really interesting question becasue, of course they must have known. It's inconceivable that a landlord wouldn't have known that one it's tenants had not paid rent for 4 years. Someone in accounts would have covered themselves by making sure that non payment was agreed by those higher up. And if those higher up did agree to it then why did they? Surely the only possible reason is that they knew that the tenant couldn't afford it.
Just read in the times that Johnson and May owned the freehold of one of the PV shops. Conflict of interest ? Yes. But no rent had been paid for 4 years. Did they not know ?
Saw a movie on Amazon Prime recently called "The Accountant" with Ben Affleck in it. A company was doing exactly what CAKE did.
Begs the question what on earth is the point in paying for an audit? Just paying hundreds of 000 pounds for nothing that can be relied on.
Firms might have to find some other way of reassuring investors their financial statements are accurate as these chartered accountants don't seem credible.
The head of Grant Thornton is correct - the auditors remit doesn't extend any further than cursory checks unless they suspect fraud. It is up to Senior Management to make sure no fraudulent activity takes place.
This off course begs the question - when the FD is bent, what then??
Great isn't it.
We don't have to make sure that the accounts aren't full of lies on an industrial scale or spot that the FD is bent as a 5 bob note. All we have to do is take a big fat fee, issue something that seems on the face of it to reassure shareholders then we can waive goodbye till same time next year.
head of grant thornton has explained to mps that it is not his firm's responsibility to ensure financial statements are correct let alone detect fraud....explains a lot.
I guess buying this chain would be a no brainer for one of the big coffee/bakery chains - Greggs would be obvious - stores are fitted out, keep the staff, a simple rebrand - its just the price that has to be right.
One top five shareholder told the Guardian it was not prepared to join any action while others suggested there was no point in doing so unless it was found that Patisserie Valerie had insurance in place which would pay out in the case of negligence.
“If this is just a case against individuals, even Luke Johnson being extremely wealthy, you are only likely to get no more than £30m.
If there is no insurance capable of paying a substantial sum out then [a class action] is just straws in the wind,” a shareholder said.
https://www.theguardian.com/business/2019/jan/30/ex-patisserie-valerie-auditor-says-not-his-role-to-uncover
The FT reports today that Philip Rubens, partner at Teacher Stern, the law firm is canvassing investors to participate in a group action claim.
And of course the media is now reporting that Mike Ashley is bidding for Patisserie Valerie!
Seriously.
I nearly spat my tea out laughing when I read it..
A lot of people must have been involved. More arrests soon ?
Yes just all delivered in by lorry... Ive been returning from nightclubs etc and seen them unloading it all lol
One for mike ashley?
Yes and there are some disgruntled now former employees saying the cafes are faux posh. Nothing is fresh it's all bought in frozen just like cheap pub food from 3663.
Oh dear - it seems the illustrious founder was the product of a marketing man's inagination - talk about house of cards!
https://www.bbc.co.uk/news/business-46821488
Patisserie Valerie report talks of fake invoices and ledgers
Bobst
The Gov't agency was the Audit commission and that did more of a political job with dear Gordon B insisting on "light touch " auditing. That quango no longer exists. All tick boxes - verbal assurances. Maybe that was GT also.
Well the Times is now saying that HMRC raised issues with the company about suspicions of fraud and forged documents 2 years plus ago so there really is no excuse for the directors or auditors not to have spotted anything. Indeed if it hadn't been for HMRC 'S winding up petition then maybe it wouldn't have come to light yet.
Makes you wonder if audits should be run by some arm of government as the current arrangements simply don't work.
Sorry for all on here that have lost money through the failure but there seem to be some misguided accusations flying around – this company have committed criminal fraud, and have therefore presumably misled with intention both auditors, regulators and investors alike. Nobody knows how complex the fraud is, so don’t know whether GT or others could have/should have spotted this.
The other notion that institutional investors won’t care about this because it’s not their own money is utter nonsense – this will be a major hit to performance to many UK managers and it’s their reputation/name above the fund. Nobody likes to lose money. The amount of work that most managers and their analysts do is typically considerable, but again, it’s hard for someone to spot fraud from provided numbers that in theory comply to FCA regulations etc. If investors had to start from a position of first deciding whether reported numbers were fraudulent then liquidity would disappear pretty quickly. Thankfully, this is very much the rare exception and not the norm, despite CAKE being a painful trade for many I’m sure.
''Luke Johnson, the multimillionaire chairman of collapsed cafe chain Patisserie Valerie, has extracted more than £40m from the business since the cafe group floated on the stock market less than five years ago''
Nice work if you can get it. Cannot see him head in hands worrying about his next slab of sponge cake and coffee!