Von Essen Hotels' dramatic collapse into administration last month has taken a new twist, with the suggestion that the company could be investigated for financial irregularities.
Administrators from Ernst & Young were called in after the luxury hotel group's financial backers - Lloyds Banking Group and Barclays - pulled the plug with the company facing debts of £250m.
Now the administrators are believed to be talking to the City of London Police regarding the state of the group's finances, according to The Times.
It said a source familiar with Von Essen, who described the company's accounts as "eccentric", went on to say: "The valuations for its hotels look highly optimistic and questions are being asked over the funds earmarked in the properties."
Von Essen Hotels is now being run by the newly appointed chief executive, Charles Prew, who is working alongside David Duggins, who has been appointed by Ernst & Young to take over from Andrew Davis, the group's chairman and founder.
Ernst & Young refused to comment on The Times article.
By Janet Harmer
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