Court files show Grant Thornton’s alleged Patisserie Valerie audit errors

FRP Advisory, the liquidator to Patisserie Valerie, has filed legal documents describing Grant Thornton’s alleged errors in its auditing of the cafe chain.

According to the Sunday Times, FRP claims that Grant Thornton’s “negligence” led Patisserie Valerie’s bosses to unknowingly allow the firm to run out of funds after undisclosed overdrafts and accounts were left unaccounted for.

The documents follow FRP’s launching of a £225m court claim against the professional services firm on the grounds of accounting fraud between 2014 and 2017.

Included in the claims are questions regarding the firm’s unusually low 0.2% interest rate on its £22.5m bank balance. 

Moreover, The Times reports that the liquidator also highlighted a fall in credit card charges from £502,525 to £355,899, despite Patisserie Valerie supposedly growing within the three-year period.

The bakery chain originally collapsed into administration in January 2019 after a £40m question mark in its finances revealed “significant fraud” within the company.

However, KPMG, the earlier appointed liquidator to be replaced by FRP, announced that the hole was actually closer to £94m.

The Big Four firm had previously said: “There may be sufficient grounds to establish potential legal claims against a number of parties. These parties may include Grant Thornton, who were the auditors to the Patisserie Valerie Group.”

In response, Grant Thornton said it would “rigorously defend” the claim, adding that the case “involves sustained and collusive fraud, including widespread deception of the auditors”.