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Bitcoin vs Cream Cakes

Post Date: November 15, 2023

This article reflects the opinions of its author and not necessarily those of ShareSoc. FTX prosecution vs that of Patisserie Valerie FTX, a cryptocurrency exchange which became one of the largest in the world with billions in deposits, declared bankruptcy on 12 November 2022.  The trial of Sam Bankman-Fried (SBF) commenced in the US at the Manhattan federal court on 3 October, 2023. SBF faced seven counts of fraud and conspiracy.  Three FTX executives agreed to plea deals, hence they became witnesses for the ...

Good Articles in Investors’ Chronicle

Post Date: October 20, 2021

The views expressed in this article are those of the author and not necessarily those of ShareSoc There were several good articles in this week’s Investors’ Chronicle. I cover them briefly below. The Editor, Rosie Carr, reported on feedback on readers’ views on taxation. Should the wealthy readers of the IC pay more was one question previously posed and the consensus answer seemed to be Yes. For pensioners it was suggested that they should pay National Insurance on their income and that there ...

Grant Thornton Fined Trivial Amount over Patisserie Valerie Audits

Post Date: September 27, 2021

The views expressed are those of the author and not necessarily those of ShareSoc. The interesting news today, at least for a former shareholder in Patisserie Holdings (CAKE) as I am, was the announcement by the Financial Reporting Council (FRC) of fines on Grant Thornton and their Audit Partner over the defective audits of the company in financial years 2015, 2016 and 2017. The company subsequently collapsed in 2018 when it became apparent that the accounts were a work of fiction. This is ...

Law Suit Launched Against Grant Thornton over Patisserie Valerie Audits

Post Date: November 21, 2020

The Daily Telegraph and some other sources have reported that the liquidators of Patisserie Valerie (CAKE) have filed a claim in the High Court against Grant Thornton over the audits of Patisserie Valerie in the years before it went into administration. I reported previously that the accounts of Patisserie were a complete fiction – see Reference 1 below – with the assets of the firm overstated by more than £90 million. The liquidators are FRP Advisory and they have appointed lawyers Mischon de ...

GB Group, Patisserie Holdings, FRC Stewardship Code and Halma

Post Date: October 27, 2019

The stock market seems to be in limbo as business waits to see the outcome of Brexit politics. In my portfolio, small cap companies are drifting down and even...

Patisserie and Interserve Administrations, plus Brexit latest

Post Date: March 16, 2019

Yesterday the administrators (KPMG) of Patisserie (CAKE) issued their initial report. It makes for grim reading. The hole in the accounts was much worse than previously thought with an overstatement of net assets of at least £94 million. That includes: Intangible assets overstated by £18m; Tangible assets overstated by £5m; Cash position overstated by £54m; Prepayments and debtors overstated by £7m; Creditors understated by £10m. The accounts were clearly a total fiction. It is uncertain whether there will even be sufficient assets ...

Metro Bank, Improving Accounts, Patisserie, Telford Homes and GoCompare

Post Date: March 6, 2019

Originally posted 28th February 2019 The latest example of a public company publishing misleading accounts is Metro Bank (MTRO). Both the FCA and PRA (the bank regulator) are looking into the “misclassification” of some loans which resulted in the bank overstating its regulatory capital. The result was that it has had to do an equity share issuance to bolster its capital. There was a very good letter to the FT today on the subject of improving accounting and audits from Tim Sutton. He ...

AssetCo, Patisserie, Stockpiling, Warehouses, Sheds, Brexit and Venezuela

Post Date: February 5, 2019

A week ago, an award of damages of £21 million plus interest and costs was made against Grant Thornton for their breach of duty when acting as auditors of AssetCo Plc (ASTO) in 2009/10. See https://www.bailii.org/ew/cases/EWHC/Comm/2019/150.html for the full judgement. I understand Grant Thornton may appeal. These are the key sentences in the judgement: It is common ground that in those years the senior management team at AssetCo behaved in a way that was fundamentally dishonest. During the audit process management made ...

Staffline Issues, Audit Purpose and Patisserie

Post Date: January 31, 2019

Yesterday Staffline Group (STAF) issued a statement first thing in the morning saying that the publication of results scheduled for that day would be delayed. The shares promptly dropped...

Patisserie – and How to Avoid Such Disasters

Post Date: January 29, 2019

The events at Patisserie (CAKE) have been well covered in both the national media and financial press so I won’t repeat them here. This article will, therefore, concentrate on...

Bogle Death, Patisserie and Diploma AGM

Post Date: January 18, 2019

The death of John Bogle has been announced at the age of 89. He wrote several very informative books on investment and was the founder of Vanguard which has grown into one of the largest mutual fund managers by promoting index fund management. He also promoted the idea that the investors should own the fund manager. He suffered from heart attacks from a young age, the first at age 31, and actually had a heart transplant in 1990. So in some ...

The trouble with net debt…

Post Date: January 5, 2019

Net debt is a vital metric for investors and lenders. What ultimately kills companies is when they are unable to pay their debts when due. Hence, measuring the ratio of net debt to profits (and cashflow) is crucial to judging a company's ability to pay and whether it is likely to find itself in trouble, potentially leading to a permanent loss of capital for investors. Therefore it is very troubling that there have been several instances in recent years where reported net ...

Too Much Cash, Wey Education and Patisserie Accounts

Post Date: November 22, 2018

Are you stacked up with cash in your ISAs, SIPPs, and direct portfolios? As a dedicated follower of fashion (if the markets are falling as investors sell, then so do I) it is of some concern that the cash is not earning any interest. There was some relatively good news yesterday from soon to be listed A.J.Bell Youinvest. They are increasing the interest they pay on cash held in portfolios. Previously you got 0.05% on balances more than £50,000. It will ...

Earthport Accounts, City of London IT and Patisserie

Post Date: November 2, 2018

Earthport (EPO) is the latest AIM company to report that its past accounts are not all they should have been. Following a review by the new CEO and CFO, it seems there have been errors in reporting of forward foreign exchange transactions. This will result in fair value adjustments and a reduction of £6.3 million to £16.6 million in the net assets of the group at June 2017. Likewise adjustments are required to previous years. Reported earnings are also reduced although ...

Patisserie General Meeting – No Excitement But Few Questions Answered Either

Post Date: November 1, 2018

I attended the General Meeting of Patisserie Holdings (CAKE) this morning at the ungodly time of 9.00 am – presumably chosen to deter attendance. An announcement earlier from the company will also have deterred attendance as it said no questions on past events would be answered so as not to prejudice investigations by “multiple regulators and authorities”. But there were about 20 shareholders present, including some institutional representatives. This GM was to approve the second tranche of share placings and I expected ...

The SFO Needs You! [If You Held Shares in Patisserie Valerie]

Post Date: April 24, 2021

The SFO has recently been in touch with registered shareholders of Patisserie Valerie (CAKE). But if, like most shareholders, your shares were held in a nominee account, they probably won't have been able to contact you. They are asking for shareholders to complete a questionnaire to assist them with their enquiries into allegations of fraud at that company. You can find full details and the questionnaire here: https://www.sfo.gov.uk/cases/patisserie-holdings-plc/ Mark Bentley, Director, ShareSoc

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