Directors said that initial investigation showed that historical statements on the cash position of the company were misstated and subject to fraudulent activity and accounting irregularities, directors said.
Hertfordshire Police said: "A 44-year-old man from St Albans has been arrested on suspicion of fraud by false representation".
The latest disclosure comes after the company warned Thursday that it will have to shut down unless it gets an "immediate injection of capital", escalating the drama swirling around a company that appeared healthy until days ago.
It was floated on the AIM stock market, for smaller companies, in 2014.
An investigation into the books is ongoing, but Patisserie estimates that it has a current net debt position of around £9.8mln, compared to a net cash position of £28.8mln which it reported in its half-year results.
Reports suggest the company has uncovered a black hole in its accounts of up to £20 million.
On Thursday, the group said that unless it could receive an "immediate injection of capital", it would be forced to stop trading, putting 2,500 jobs at risk across the UK.
It had been feared that the company could go into administration as soon as this week, with advisers at PwC thought to be on stand-by for a collapse.
Patisserie Holdings - which owns additional brands such as Druckers, Philpotts and Baker & Spice - trades from more than 200 stores and also has a partnership with Sainsbury's, with branded counters present in the supermarket.
The firm said it had also raised another £15m by issuing new shares.
Parent firm Patisserie Holdings has received a winding up petition for its principal trading unit Stonebeach.
Chairman Luke Johnson is said to be considering stepping in with funds that could help save 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".
Entrepreneur Luke Johnson is Patisserie Holdings' largest shareholder.
Marsh has been instrumental in the company's growth since he was appointed to the role in 2006. He had previously advised many companies over the previous 18 years in both finance director and consultancy roles.
Mr Marsh was arrested and later released on police bail.
The first Patisserie Valerie café was opened in 1926 by Belgian born founder Madame Valerie.