THE entrepreneur who owns Brighton Palace Pier has hit back at shareholders who criticised his actions at one of his flagship 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.

It was thought to be on the brink of collapse after the arrest of its finance chief on suspicion of fraud until Mr Johnson pledged up to £20 million in new loans.

Yesterday he faced down sharp criticism from shareholders as the cake chain sought backing for a rescue plan.

He told investors at a meeting that the emergency fundraising in October had been enacted when the firm was just “three hours” away from going bankrupt.

He said: “Quite a few companies in our situation aren’t saved, they go into administration.”

The majority of shareholders had already backed the rescue plan as final votes were being counted after an emergency general meeting for Patisserie Holdings, the parent of the cake chain.

Shareholders took aim at the emergency fundraising, which they said would dilute their current stakes in the company.

One investor accused the management of “holding a gun to our heads”.

Another said: “Why should the new shareholders benefit from buying shares at a discount?”

Mr Johnson defended the rescue plan and warned shareholders that if the fresh funds were not approved “the company risks going into administration”.

He said he had made a personal commitment to reduce his involvement in other businesses and focus on Patisserie Holdings.

Mr Johnson is chairman of Gail’s Bakery parent company Bread Holdings and the Brighton Pier Group and also backs a number of other ventures through his investment vehicle Risk Capital Partners.

The future of Patisserie Holdings was first thrown into question last month after it uncovered fraudulent activity around its financial accounts.

It was served a wind-up order by the taxman over £1.14 million owed to HM Revenue and Customs.

Mr Johnson was forced to swoop in with a rescue package that saw him pledge up to £20 million in new loans for the business.