Sunday 19 July 2020 6:48 pm

Grant Thornton faces legal action over Patisserie Valerie audit

Grant Thornton is reportedly facing legal action over its auditing of cafe chain Patisserie Valerie, which collapsed last year following allegations of suspected fraud. 

Liquidator FRP Advisory has hired law firm Mishcon de Reya to explore a claim, potentially worth tens of millions of pounds, against Grant Thornton, which audited the cake shop’s accounts for 12 years before its collapse. 

Read more: Patisserie Valerie appoints administrators for Grant Thornton probe

FRP has reportedly recently commissioned a report from Smith & Williamson into Grant Thornton’s audit of Patisserie Valerie, which suggested significant failings in its work. 

A decision on whether to take Grant Thornton to court is expected to be made in the next few weeks, the Sunday Times reported. 

Patisserie Valerie collapsed into administration in January last year following the shock revelation of “significant fraud” at the company and the discovery of a £40m hole in its finances.

However, KPMG, which was originally appointed as liquidator, later announced that the missing money actually totalled £94m.

FRP replaced KPMG in September after the Big Four firm said it could not investigate Grant Thornton due to a conflict of interest.

At the time, FRP said it would explore legal claims in an attempt to return money to investors who lost funds when the business collapsed. 

KPMG had previously said “there may be sufficient grounds to establish potential legal claims against a number of parties.

Read more: Grant Thornton set for scrutiny as Patisserie Valerie handed to liquidators

“These parties may include Grant Thornton, who were the auditors to the Patisserie Valerie Group.”

However, KPMG added that it could not probe the situation itself because “Grant Thornton are also auditors to KPMG”.

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