Cake Box CFO walks away after accounting controversy

The finance chief of Cake Box is to resign after accounting errors prompted a plunge in the firm’s share price.

Pardip Dass, who co-founded the Enfield-based business, will step down at the end of March “to pursue other interests,” the company said.

David Forth, who has held senior positions at AB Foods and Eddie Stobart, will step in as interim CFO.

Dass said: “I am extremely proud of what we have achieved at Cake Box, from first beginning to franchise the business model, to listing the business on AIM.

“After a decade with the business, now is the right time to move on following an orderly handover to David. I remain passionate about Cake Box and a supportive shareholder, and wish my dedicated colleagues all the very best for the future.”

Shares in the egg-free cake maker have dropped 35% since mid-January, when a finance blogger identified “an erroneous £2 million entry within the cash flow statement.”

Auditors RSM resigned in September 2021.

In its update today, the company also announced a new COO and marketing director as part of a boardroom shake-up. Cake Box said sales were on track to meet expectations.

Founded in 2008, Cake Box has since grown to over 180 branches across the UK. It reported revenue of £22 million in 2021.

CEO and co-founder Sukh Chamdal and his spouse Santosh Chamdal sold a 7.5% slice in the company, worth £11 million, just weeks before the share price tanked in January.

The firm set aside £460,000 last year to cover fees and fines after a malware attack resulted in the loss of customers’ personal data. Cake Box did not notify customers and shareholders about the data breach until a year after it took place.

It appointed internal auditors BDO to “ensure that stronger ongoing controls are operated across the group particularly in light of the data breach.“