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  • FIRST POST
    • DesmondT
    • By DesmondT 11th Oct 18, 9:40 PM
    • 5Posts
    • 3Thanks
    DesmondT
    Patisserie Valerie
    • #1
    • 11th Oct 18, 9:40 PM
    Patisserie Valerie 11th Oct 18 at 9:40 PM
    Hello
    I'm unfortunate to have a significant shareholding in PV via my SIPP. I did my research, studied the books (via Stockopedia), understood the business and invested a modest proportion of my fund over the last. year. All the indications were that this was a stable, low risk company with good growth potential. It now appears that there may have been some fraudulent accounting and at the very least it looks like the auditors were negligent.

    My question is, assuming that the Company goes into administration, what steps can I take to recover what are likely to be significant loses? If I own these shares through a SIPP (in my case Hargreaves Lansdowne) am I still able to bring an action as a shareholder? In general do I have any come-back on this?

    Thanks for any input.
Page 1
    • fun4everyone
    • By fun4everyone 11th Oct 18, 9:48 PM
    • 1,796 Posts
    • 2,915 Thanks
    fun4everyone
    • #2
    • 11th Oct 18, 9:48 PM
    • #2
    • 11th Oct 18, 9:48 PM
    It will be up to the FCA if there are criminal charges to answer to and if shareholders are due to get anything back. Tesco were guilty of dodgy accounting and were forced to pay back to shareholders although it was pretty pitiful https://www.tescoplc.com/investors/tesco-compensation-scheme/.

    I would not expect anything positive to come from this in your shoes if they do go bust.
    • Alexland
    • By Alexland 11th Oct 18, 9:56 PM
    • 5,765 Posts
    • 5,032 Thanks
    Alexland
    • #3
    • 11th Oct 18, 9:56 PM
    • #3
    • 11th Oct 18, 9:56 PM
    If they are short of cash and there is doubt on the true earnings potential of the business due to fradulant accounting then a brave investor would want to secure a big slice of the cake and dilute existing shareholders.

    Although I have never been a customer they always seem to be doing plenty of good business so I would be surprised if nobody wants to save them.

    Alex
    Last edited by Alexland; 11-10-2018 at 10:00 PM.
    • spenderdave
    • By spenderdave 12th Oct 18, 6:09 AM
    • 498 Posts
    • 283 Thanks
    spenderdave
    • #4
    • 12th Oct 18, 6:09 AM
    • #4
    • 12th Oct 18, 6:09 AM
    Your experience is one that never gets any coverage in the media handling of these situations. As others have said I suspect you will not have a good outcome out of it.

    I have visited their outlet at Baldock Services a couple of times and been quite satisfied, a place to get a decent meal unlike the junk food being sold by other places there. Last year they opened a shop in the new Bracknell town centre which is very popular with their cakes. Let us hope they recover.
    • jamei305
    • By jamei305 12th Oct 18, 6:43 AM
    • 460 Posts
    • 570 Thanks
    jamei305
    • #5
    • 12th Oct 18, 6:43 AM
    • #5
    • 12th Oct 18, 6:43 AM
    What I find astounding is that the winding-up petition was published in the London Gazette on the Friday, yet no one seemed to notice it until the following Tuesday.

    So much for markets pricing everything in already.
    • FatherAbraham
    • By FatherAbraham 12th Oct 18, 6:48 AM
    • 1,004 Posts
    • 763 Thanks
    FatherAbraham
    • #6
    • 12th Oct 18, 6:48 AM
    • #6
    • 12th Oct 18, 6:48 AM
    Hello
    I'm unfortunate to have a significant shareholding in PV via my SIPP. I did my research, studied the books (via Stockopedia), understood the business and invested a modest proportion of my fund over the last. year. All the indications were that this was a stable, low risk company with good growth potential. It now appears that there may have been some fraudulent accounting and at the very least it looks like the auditors were negligent.

    My question is, assuming that the Company goes into administration, what steps can I take to recover what are likely to be significant loses? If I own these shares through a SIPP (in my case Hargreaves Lansdowne) am I still able to bring an action as a shareholder? In general do I have any come-back on this?

    Thanks for any input.
    Originally posted by DesmondT
    Thanks for your frank post, which will no doubt be bookmarked, and often cited on this board, when explaining the benefits of diversification to new investors.

    It might be an idea to be more circumspect with regards to allegations of negligence, no matter what one's emotions are, from a legal perspective. We wouldn't want you to suffer a defamation lawsuit from the auditors, in addition to your investment losses.
    Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
    THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
    • Uxb
    • By Uxb 12th Oct 18, 7:01 AM
    • 1,306 Posts
    • 1,532 Thanks
    Uxb
    • #7
    • 12th Oct 18, 7:01 AM
    • #7
    • 12th Oct 18, 7:01 AM
    What I find astounding is that the winding-up petition was published in the London Gazette on the Friday, yet no one seemed to notice it until the following Tuesday.
    So much for markets pricing everything in already.
    Originally posted by jamei305
    Even more amazing that the board of directors did not know about it until Wednesday -after everyone else had suddenly found it and probbaly picked up the phone to the MD despite the winding up petition being filed on the 14th Sept.
    • Glen Clark
    • By Glen Clark 12th Oct 18, 7:03 AM
    • 4,306 Posts
    • 3,329 Thanks
    Glen Clark
    • #8
    • 12th Oct 18, 7:03 AM
    • #8
    • 12th Oct 18, 7:03 AM
    A month ago the boss of Patesserie Valerie posted his
    "business beginners guide to tried and tested swindles"

    https://www.thetimes.co.uk/article/luke-johnson-a-business-beginners-guide-to-tried-and-tested-swindles-08220xhqf


    It is difficult to get a man to understand something, when his salary depends on his not understanding it. --Upton Sinclair
    • Malthusian
    • By Malthusian 12th Oct 18, 8:37 AM
    • 6,774 Posts
    • 10,985 Thanks
    Malthusian
    • #9
    • 12th Oct 18, 8:37 AM
    • #9
    • 12th Oct 18, 8:37 AM
    I did my research
    Originally posted by DesmondT
    This rarely ends well.

    My question is, assuming that the Company goes into administration, what steps can I take to recover what are likely to be significant loses?
    Very few. You invested in a single share, which you knew (as you did your research) had a risk of 100% permanent loss, and that risk has come to pass.

    I would not waste any mental energy on the possibility of action against the directors, write it off, and treat any return from the administration as a bonus.

    If I own these shares through a SIPP (in my case Hargreaves Lansdowne) am I still able to bring an action as a shareholder?
    Forget it. The big institutional shareholders or the administrator will pay for any action that can usefully be brought, and if any redress is paid to shareholders, you will get your share.
    • kidmugsy
    • By kidmugsy 12th Oct 18, 8:48 AM
    • 12,480 Posts
    • 8,855 Thanks
    kidmugsy
    When people say that equities are risk investments, this sort of thing is what they ought to mean, not waffle about standard deviations.
    Free the dunston one next time too.
  • archived user
    Directors being arrested is very unusual so risk is about standard deviations and more importantly co-variances!
    https://www.ft.com/content/3ab490d8-cdf4-11e8-b276-b9069bde0956
    • Uxb
    • By Uxb 12th Oct 18, 9:26 AM
    • 1,306 Posts
    • 1,532 Thanks
    Uxb
    For the rest of us without a FT subscription - which is where that link leads - to a FT subscription page
    Same story at
    https://www.dailymail.co.uk/news/article-6268589/Patisserie-Valerie-finance-chief-arrested-20million-black-hole-chains-funds.html
    and for those who regard the DM as the devils spawn
    from the Telegraph
    https://www.telegraph.co.uk/business/2018/10/12/patisserie-valerie-finance-director-chris-marsh-arrested-police/
    • verybigchris
    • By verybigchris 12th Oct 18, 9:35 AM
    • 526 Posts
    • 808 Thanks
    verybigchris
    For the rest of us without a FT subscription - which is where that link leads - to a FT subscription page...
    Originally posted by Uxb
    If there's a FT story you want to read without a subscription, search it's headline on Google and click the result, and you'll get straight through to the article.
    • Malthusian
    • By Malthusian 12th Oct 18, 9:52 AM
    • 6,774 Posts
    • 10,985 Thanks
    Malthusian
    It might be an idea to be more circumspect with regards to allegations of negligence, no matter what one's emotions are, from a legal perspective. We wouldn't want you to suffer a defamation lawsuit from the auditors, in addition to your investment losses.
    Originally posted by FatherAbraham
    That there was fraudulent accounting is already a matter of public record and "at the very least it looks like the auditors were negligent" is fair comment. Based on what is already known, the only way the auditors could not have been negligent is if the entire fraud took place in the few months since the auditors did their last audit, which is implausible. Although I am not a judge, I just play one on TV.

    The OP will not get a defamation lawsuit. In the immensely unlikely event that the utterly useless clowns at Grant Thornton (who I am reliably informed have poor body odour and kick puppies) bother to take action against the OP for defamation, they will issue a Defamation Act notice to MSE, who will give the OP the option of whether to provide his full name and address and stand by his statement, or let MSE delete the post. If he chooses the second option that will be the end of it.

    Grant Thornton is the number 5 accountant in the UK, the top of the second division outside the "Big Four" (PWC, E&Y, KPMG and DTT). With outstanding work like this they're well on their way to making it a Big Five.
    • Glen Clark
    • By Glen Clark 12th Oct 18, 10:44 AM
    • 4,306 Posts
    • 3,329 Thanks
    Glen Clark
    If there's a FT story you want to read without a subscription, search it's headline on Google and click the result, and you'll get straight through to the article.
    Originally posted by verybigchris
    Just to add that puts a cookie on your PC and when you have a few of those it blocks further access until you clear your cookies
    It is difficult to get a man to understand something, when his salary depends on his not understanding it. --Upton Sinclair
    • moneyfoolish
    • By moneyfoolish 12th Oct 18, 11:38 AM
    • 535 Posts
    • 321 Thanks
    moneyfoolish
    If they are short of cash and there is doubt on the true earnings potential of the business due to fradulant accounting then a brave investor would want to secure a big slice of the cake and dilute existing shareholders.

    Although I have never been a customer they always seem to be doing plenty of good business so I would be surprised if nobody wants to save them.

    Alex
    Originally posted by Alexland
    Very nice cakes if on the expensive side. I use 2 of their shops close to me and they always seem to be busy.
    • veryintrigued
    • By veryintrigued 12th Oct 18, 11:39 AM
    • 2,816 Posts
    • 2,393 Thanks
    veryintrigued
    That there was fraudulent accounting is already a matter of public record and "at the very least it looks like the auditors were negligent" is fair comment. Based on what is already known, the only way the auditors could not have been negligent is if the entire fraud took place in the few months since the auditors did their last audit, which is implausible. Although I am not a judge, I just play one on TV.

    The OP will not get a defamation lawsuit. In the immensely unlikely event that the utterly useless clowns at Grant Thornton (who I am reliably informed have poor body odour and kick puppies) bother to take action against the OP for defamation, they will issue a Defamation Act notice to MSE, who will give the OP the option of whether to provide his full name and address and stand by his statement, or let MSE delete the post. If he chooses the second option that will be the end of it.

    Grant Thornton is the number 5 accountant in the UK, the top of the second division outside the "Big Four" (PWC, E&Y, KPMG and DTT). With outstanding work like this they're well on their way to making it a Big Five.
    Originally posted by Malthusian
    He's former EY too isn't he?
    • LHW99
    • By LHW99 12th Oct 18, 12:17 PM
    • 2,203 Posts
    • 2,053 Thanks
    LHW99
    If there's a FT story you want to read without a subscription, search it's headline on Google and click the result, and you'll get straight through to the article.
    Just to add that puts a cookie on your PC and when you have a few of those it blocks further access until you clear your cookies
    I tend to use the cached version - not sure if that adds cookies as well, or not.
    • AnotherJoe
    • By AnotherJoe 12th Oct 18, 12:54 PM
    • 15,983 Posts
    • 19,184 Thanks
    AnotherJoe
    There seems little point in a claim against the company because even if they had the money, the hit would reduce the share price by an equivalent amount

    I'm "owed" 10k by the CEO of a US company that sold all his shares and decamped to Mexico a week later, before it turned out a day or two after that, that the whole company was essentially a complete fraud and it was shut down. Somehow I cant see that ever being recompensed

    So, just write it off to experience. Sh*t happens, I've had worse.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Thrugelmir
    • By Thrugelmir 12th Oct 18, 1:19 PM
    • 64,944 Posts
    • 57,265 Thanks
    Thrugelmir
    what steps can I take to recover what are likely to be significant loses?
    Originally posted by DesmondT
    Surprising question if you are a seasoned investor. With risk comes reward, and potentially total loss. That's the nature of investing.

    One of the most basic rules is only gamble with what you can afford to lose.

    Or is this a yet another fake news story to create a discussion?
    If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.
    ― Niall Ferguson
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