It was a winding up order that started it, presented to The Gazette on a quiet September’s day, where it sat for a month like a ticking time bomb. Not even the board of the company in question knew a countdown had started.

This was not Act One of the Patisserie Holdings (LON:CAKE) fraud saga. Nobody knows how deep the rot goes, apart from the perpetrators. The fictitious accounts that propped this fraud up like a house of cards could even pre-date the May 2014 initial public offering. No-one has yet indicated otherwise.

The gig’s up. A few bad actors have dented a lot of people’s wallets. When good investors fail, they learn and move on - after all, experience is what you get when you don’t get what you want. Patisserie Holdings has been dishing out quite a lot of experience, recently.

It’s a curious feeling, revisiting the group’s half-year update from 2018, less than five months before that announcement in October. Can any of the figures be trusted or was it all a desperate work of fiction? I’m squinting at the screen, looking for hints of what was to come.

Surely, the diligent investor can’t be so easily duped? And yet nothing jumps out. The numbers are great but not stratospheric. They have been well-judged by a competent liar. Perhaps, in retrospect, they are too neat, too tidy. Easy to say, with hindsight.

Like the rest of the market, I didn’t have a clue about Patisserie Holdings. People want to trust other people. An unfortunate corollary of this is that smart, committed fraudsters can create a surprisingly large mess.

It’s a sad state of affairs. As Paul Scott notes, other frauds “such as Quindell, Globo, and Carillion, were easy to spot a mile off - indeed we warned investors of all 3 here, long before they blew up. Patisserie Valerie however, appeared to be a wonderful, cash generative business…”

Investment post-mortem: such a grim phrase to apply to a purveyor of cakes...

Following the crumbs - a brief timeline of events

Before the storm

  • 14 May 2014: CAKE raised £32.8m (before expenses) through the Placing, the net proceeds of which were used “to repay the Group's existing outstanding senior debt and shareholder loans.

    • Selling shareholders also received gross proceeds of £46.5m pursuant to the Placing

  • 27 June 2014: Options…

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