Page 22 - Patisserie Valerie Teaching Note
P. 22

Luke Johnson




               Johnson said that the speed at which Patisserie Valerie

               collapsed left him reeling with shock, unable to sleep and

               struggling to concentrate. “If I was arrogant at times before,

               my ego has taken quite a battering since. A very public

               disaster such as this shatters your self-belief. You think you

               are constructing a reasonably well-ordered life, and then in

               a matter of a couple of days it all starts to unravel.” (B)


               A few weeks before the collapse Johnson had been

               pontificating on the characteristics of fraud and how to

               identify such. However, within a couple of months his

               company had been sold off and he had lost nearly £180m of

               his £240m wealth.


               TRUST


               “I received solid weekly numbers, comprehensive monthly
               management accounts, and of course annual accounts that

               were given a clean bill of health by our auditors. If ever

               there were queries, I got satisfactory answers.”


                                                                  Luke Johnson


               To some extent Johnson can be forgiven for not appreciating

               that fraud was being perpetrated. On one hand he trusted

               the friend he had previously worked with and on the other

               he trusted the independent auditors he thought were

               looking after the interests of the shareholders.


               The problem appears to be that there was little if any

               internal auditing and just as importantly it is essential to
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