The suspended finance chief of Patisserie Valerie's parent firm was arrested by police overnight, just days after the discovery of potentially fraudulent accounting irregularities.
Patisserie Holdings said in a market announcement on Friday that Chris Marsh, who was suspended from his role earlier this week, has since been released on bail.
Patisserie Valerie also has a branch in Chichester.
It comes just days after the cafe chain owner said it had discovered a major black hole in its accounts.
Patisserie Holdings said on Wednesday that it has been notified of ‘significant, and potentially fraudulent, accounting irregularities and therefore a potential material mis-statement of the company's accounts’.
This significantly affected the company's cash position, with the firm saying it could lead to a ‘material change’ in its overall financial position.
Mr Marsh was later suspended from his role and accountancy giant PwC drafted in to look through the company's books.
To compound its troubles, Patisserie Holdings has also received a winding-up petition for its principal trading unit Stonebeach, with a hearing now scheduled for October 31.
It relates to £1.14m owed to HMRC.
The cake chain has now warned that it will cease trading without an ‘immediate’ cash injection.