Patisserie Valerie boss Paul May quits The Restaurant Group board

Patisserie Valerie chief executive Paul May today quit the board of The Restaurant Group to concentrate on helping the cakes chain bounce back from a devastating accounting scandal.

The group, which owns the Frankie & Benny’s and Chiquito brands, said that 59-year-old May has stepped down from his role as non-executive director with immediate effect.

TRG’s chairman, Debbie Hewitt, said the firm understood May’s decision after the patisserie’s tumultuous week. The pastry chain is chaired by serial entrepreneur Luke Johnson who owns 37% of the shares.

Johnson agreed to provide £20 million in loans to stop the business from collapsing, safeguarding 2800 jobs, but an emergency share placing is likely to see the value of the group slashed from almost £450 million to less than £70 million when the shares eventually resume trading.

AIM-listed Patisserie Valerie shocked investors last week by warning of the discovery of “significant, and potentially fraudulent, accounting irregularities”.

It suspended finance chief Chris Marsh from his role, and he has since been arrested on suspicion of fraud and bailed. The Serious Fraud Office has opened a criminal investigation into potential fraud.

The dramatic week also saw directors uncover a winding-up petition from HMRC against Patisserie Holding’s main trading subsidiary over an unpaid £1.14 million tax bill, as well as two “secret” company bank overdrafts totalling almost £10 million. Johnson said that neither he nor auditor Grant Thornton had known about them.

A spokesman for Patisserie Valerie said May’s decision to leave the board of TRG meant that he could “focus on his role” at the helm of the business.

Sahill Shan, analyst with N+1 Singer said the move was “understandable given the fallout from the Patisserie Valerie fiasco”.