The finance director of Patisserie Valerie, Chris Marsh, was arrested last night and then released on bail, according to the company's owner.

The cafe chain, which has a branch in Gloucester and two in Cheltenham, is fighting for survival after revealing this week that it had uncovered "significant, and potentially fraudulent, accounting irregularities", as reported by the BBC.

Mr Marsh was suspended when the problems were discovered. The Serious Fraud Office confirmed it had "opened a criminal investigation into an individual".

Yesterday, Patisserie Holdings, the owner of the chain, said it needed "an immediate injection of capital" to continue trading.

In a brief announcement today, 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."

In its most recent results statement in May, the company said it had cash reserves of £28.8m. But on Thursday, Patisserie Holdings said it had found "a material shortfall between the reported financial status and the current financial status of the business".

The first Patisserie Valerie store was opened in the Soho district of London in 1926 by a Belgian woman, Madame Valerie. In 2006, it had just eight stores. It is now part of a chain with 206 stores which employs more than 2,000 people.

Patisserie Valerie's stores are continuing to operate, and it's thought that talks are currently taking place in an attempt to save the business.