Patisserie Valerie's under-fire boss steps down from Restaurant Group

15th Oct 2018 11:10

(Sharecast News) - Patisserie Valerie's under-pressure chief executive Paul May has quit the board of The Restaurant Group.TRG chair Debbie Hewitt said the board "understand and accept his decision" to step down as a non-executive director. She also thanked him for his "valuable contribution" to business, which owns around 500 restaurants including the Frankie & Benny's chain. May had been a non-executive director since 2017.It is understood he has stepped down to better focus on Patisserie Valerie, which is enduring a tumultuous period after a £20m black hole was found in its accounts.The café chain announced "significant, and potentially fraudulent, accounting irregularities" and chief financial officer Chris Marsh has been arrested and released on bail. He has been suspended by the company.The chain faced collapse before ex-Pizza Express chairman Luke Johnson, its biggest shareholder, stepped in with £20m of loans. On Sunday, he spoke of his horror at discovering "secret" multi-million pound overdrafts of almost £10m at the company.An emergency share placing was closed on Friday that will lead to the market value of Patisserie Valerie being slashed from around £450m just before the crisis to less than £70m.May and Johnson apparently snubbed a £30m deal that might have protected small investors, the Sunday Telegraph reported, with activist investment fund Crystal Amber plotting a convertible debt deal that would have meant investors "would not have seen their stakes diluted by the emergency fund raise that offered up new shares at a huge discount".Shares in the Aim-listed business are currently suspended. Reports on Monday said that the chain was mulling legal action because auditor Grant Thornton had given the most recent accounts a clean bill of health.