Lee Ginsberg's resignation from the board of Patisserie Valerie has been announced a day after the troubled bakery group revealed that investigators had uncovered an "extensive" misstatement of its accounts.
The departure of the non-executive director and deputy chairman follows that of James Horler earlier this week, leaving entrepreneur and executive chairman Luke Johnson as the only remaining board member to pre-date the announcement of suspected fraud in October 2018.
A statement published to the London Stock Exchange today read: "Patisserie Holdings plc announces today that Lee Ginsberg, non-executive director and deputy chairman, has resigned with immediate effect, in order to focus on his other commitments. The board would like to thank him for his service."
Patisserie Valerie revealed yesterday that it had hired auditor KPMG to review all options available to it as it bids to recover from the "devastating effects of the fraud".
In a statement posted to the London Stock Exchange parent company, Patisserie Holdings said: "The work carried out by the company's forensic accountants since it announced that evidence of fraud had been uncovered on 10 October 2018] has revealed that the misstatement of its accounts was extensive, involving very significant manipulation of the balance sheet and profit and loss accounts. Among other manipulations, this involved thousands of false entries into the company's ledgers. It will take some time before a reliable trading outlook can be completed while the above work streams progress."
The company said that initial indications were that the cash flow and profitability of the business had been overstated in its trading update of 12 October 2018, which stated that the group required an immediate cash injection of no less than £20m without which administrators would need to be called in.
As a result, £15m of new shares were issued to private investors, following a £20m funding injection by director Luke Johnson.
The company has appointed RSM as auditors but warned that it will take some time to complete a restatement of its accounts. It has also been in discussion with bankers to extend the standstill of its facilities beyond 18 January.