TV Dragon and leisure entrepreneur Duncan Bannatyne has said he feels ‘betrayed’ over revelations of fraud and money laundering by former staff at The Bannatyne Group.

Newly-published accounts show Bannatyne Fitness profits dropped from £10m to £3m in the past year. The accounts make clear what is believed to be the cause: “During the year, the directors identified that misappropriation of the company and the group’s assets had been occurring for a number of years by former employees.”

Former Bannatyne Group finance director Christopher Watson is expected to confess next week to charges of fraud and money laundering when he appears for a plea hearing, according to the Northern Echo.

Prosecutors say electronic cash transfers from Bannatyne company accounts to Watson’s personal accounts and those of his businesses between July 2008 and July 2014 totalled almost £8m, although he is reportedly due to dispute the amount. A spokesman for the Crown Prosecution Service said previously: “These sums of money were allegedly used to gamble, settle personal debts and buy and renovate properties.”

Watson has not been the only former Bannatyne employee to face police scrutiny recently. In December 2014, former chief executive and MD of the company Nigel Armstrong, was arrested on suspicion of fraud and bailed.

Armstrong has since been cleared of any wrongdoing over the case, and is reportedly planning to take Bannatyne – who was best man at Armstrong’s wedding – to court, seeking a £10m payout for unfair dismissal. Bannatyne has indicated he will strongly contest the claims of his former friend.

Bannatyne Fitness – the health club chain started by Bannatyne in 1997 – now comprises more than 60 health clubs across the UK, with many also featuring a Bannatyne Spa.

Bannatyne says changes to his top team, which have included the appointment of Justin Musgrove as Bannatyne Group MD and Ken Campling as finance director of Bannatyne Fitness, mean that the business is now in “great shape” to move forward and expand.