The company said on Wednesday that it has been notified of "significant, and potentially fraudulent, accounting irregularities and therefore a potential material mis-statement of the company's accounts".
Hertfordshire Police told the BBC: "A 44-year old man from St Albans has been arrested on suspicion of fraud by false representation".
The crisis-hit company needs an immediate cash injection if it is to survive, say bosses.
It was floated on the AIM stock market, for smaller companies, in 2014.
It has also been earmarked for "general working capital purposes and committed capital expenditure", Patisserie Holdings said.
Adding to the company's headache this week was an announcement that the board had just learned of a winding-up petition that had been filed against its main subsidiary by the taxman.
Reports suggest the company has uncovered a black hole in its accounts of up to £20 million.
It comes after Patisserie Holdings, which also owns other brands including Philpotts, Baker & Spice and Flour Power City, warned that it would not be able to continue trading without an immediate injection of capital.
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.
"Any further findings of financial irregularity within the group could result in yet further material losses for the Company, its shareholders and wider stakeholders".
Patisserie Holdings Plc finance chief Chris Marsh was arrested as United Kingdom fraud prosecutors opened a probe into an accounting scandal that threatens to shutter the cake baker's 200-plus stores.
Shares of the company remain suspended from trading.
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".
Mr Marsh is said to have qualified as a chartered accountant with Vantis Plc (formerly Morton Thornton) and also qualified as a chartered tax accountant with Ernst & Young.
Last May he said that Patisserie Valerie had "a strong balance sheet" so the problems will come as a major disappointment to him.
Mr Johnson, a serial entrepreneur, is the largest shareholder in Patisserie Holdings, and had a 37% stake in the business ahead of the rescue deal.
Revenue climbed 9.1 per cent to £60.5 million, it said at the time.