THE serial entrepreneur who owns Brighton Palace Pier was last night battling to save one of his flagship multi-million pound businesses.

Luke Johnson is the chairman and largest shareholder in Patisserie Holdings with a 37 per cent stake – reported to have been worth more than £160 million.

The cake shop and continental tea room has more than 200 stores including East Street, Brighton, Western Road, Hove, and Terminus Road, Eastbourne.

But it is now thought to be on the brink of collapse after the arrest of the company’s suspended finance chief on suspicion of fraud.

Last night Mr Johnson pledged up to £20 million in new loans in order to keep the chain’s parent company Patisserie Holdings afloat after a wind-up order was issued against it by the taxman.

The company also plans to raise as much as £15 million through the issue of new shares.

Funds raised through the share placement will be used to pay back around half the money loaned by Mr Johnson, as well as to meet outstanding liabilities including the £1.14 million bill owed to HM Revenue & Customs.

Mr Johnson said: “We are all deeply concerned about this news and the potential impact on the business. We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible.”

He said he could not speak to The Argus when we contacted him yesterday afternoon.

Last May he said that Patisserie Valerie had “a strong balance sheet” so the problems will come as a major disappointment to him.

The cafe chain had uncovered “significant, and potentially fraudulent, accounting irregularities”.

Finance director Chris Marsh was suspended when these problems were discovered.

Yesterday the Serious Fraud Office said it had “opened a criminal investigation into an individual”.

“We can give no further information or comment at this time,” the SFO said without naming the individual.

Mr Marsh was arrested and later released on police bail.

Yesterday a spokesman for the firm said: “The company has been made aware that Chris Marsh, who is currently suspended from his role as company finance director, was arrested by the police last night and has been released on bail.

“Further updates will be released in due course as appropriate.”

Parent firm Patisserie Holdings has received a winding up petition for its principal trading unit Stonebeach.

It relates to £1.14 million owed to HMRC and was filed at the High Court of Justice, Companies Court. The winding up hearing is scheduled for October 31 and Patisserie Holdings said it is in communication with HMRC.