Nicola Sharp of business crime solicitors Rahman Ravelli believes more arrests could follow.
Five people were arrested and questioned over alleged accounting fraud at Patisserie Valerie as the investigation into the café chain's collapse moved up a gear.
According to the UK's Serious Fraud Office (SFO) the arrests took place in a joint operation with Hertfordshire, Leicestershire and Metropolitan police. They relate to the discovery of a £94M shortfall in the company's accounts that was discovered earlier this year.
The SFO did not disclose the names of those arrested or the precise reason for the detention of the individuals. It has said it was conducting inquiries into the behaviour of individuals regarding how the firm came to be in administration. Café Patisserie's problems led to the loss of 900 jobs and the closure of 70 of its stores and concessions; which is almost a third of its total outlets. Luke Johnson, the cafe chain's former chairman, was not among those arrested, according to reports. Johnson, who was the firm's largest shareholder when it failed, broke his silence over the affair just a few weeks ago, saying the company's problems had left him physically ill. He had lent £10M of his own money to the firm when the problems became apparent and fraud accusations first surfaced. Chris Marsh, Patisserie Valerie's finance director, was arrested and bailed when the problems came to light.
The sheer scale of the accounting black hole probably means that it was only going to be a matter of time before further arrests were made.
Obviously nobody but those closely involved with what has happened and those investigating it are able to speak with any authority on the cause of the problems. And that is far from likely in the near future. But as the investigation now appears to be moving forwards it would be a major surprise if we did not see more arrests and interviews in the coming months.
You can read more about Corporate Investigations at the Rahman Ravelli website.