DETECTIVES believe Abijath Desikan was armed with a large kitchen knife and laid in wait to attack a staff member for their work keys, before holding a woman hostage at a Southbank bar for almost eight hours.

Police allege Mr Desikan had taken a knife with a 24cm blade from his home and then waited until a worker left the bar and restaurant to top up their parking.

It is alleged he then robbed the staff member of their keys and entered the premises through a locked ‘staff only’ back door.

He then barricaded himself inside a store room with a distraught female worker and held her hostage for almost eight hours.

The siege ended when the woman fled.

Mr Desikan told the out of sessions court hearing today that he had quit his job at Ludlow Bar and Dining Room a week ago.

Police say Mr Desikan “is not fit to be interviewed” so have been unable to ask him further questions.

Mr Desikan, 35, of no fixed address has been charged with armed robbery, false imprisonment and assault with a weapon.

He faced an out of sessions hearing and was remanded in custody to appear in Melbourne Magistrates’ Court tomorrow morning.

media_camera A woman emerges from the building at 5.25am. Picture: Nicole Garmston

media_camera The woman is met by police outside the restaurant. Picture: Nicole Garmston

media_camera Paramedics take a man, believed to be the siege suspect, to a waiting ambulance. Picture: Nicole Garmston

Police have described the 35-year-old man as a “disgruntled” former employee of the popular venue.

But a source close to the restaurant said the man quit of his own volition after being employed from January to March.

“He was a good employee, and we actually offered him a promotion,” the source said.

“The guy had a paranoid psychotic breakdown, he was wandering around the city thinking people were talking to him.

“He wasn’t threatening staff, he wanted to come inside and sit down.”

Police Acting Inspector Travis McCarthy said the man was hit with a Taser by officers as they entered a storeroom where he was holed up.

He had been armed with a knife, police said. The woman escaped without physical injury.

The man was taken to St Vincent’s hospital under guard after agreeing to release the woman, a 27-year-old Ludlow employee.

The pair knew each other, Inspector McCarthy said.

“He was fairly disgruntled about some employment issues with the restaurant,” Inspector McCarthy added.

media_camera Heavily armed police at Southbank. Picture: Brendan Francis media_camera Police on scene at Southbank. Picture: Brendan Francis

media_camera The scene at Ludlow this morning. picture: Brendan Francis

media_camera Police with cutting equipment. Picture: Nicole Garmston media_camera Taking up position behind a taxi. Picture: Nicole Garmston

media_camera Police talk with people at the scene during the siege.

media_camera Police allowed media through the cordon to the front entrance of Ludlow soon after the siege ended. Picture: Nicole Garmston

media_camera This file photograph was taken inside the Ludlow.

media_camera The Ludlow at busy Riverside Quay, Southbank. Image: Google Maps

Police believe the victim was not targeted.

“It’s just the case of she happened to be there at the time when he’s gone into the storeroom,” Insp McCarthy said.

“There’s nothing to indicate that any direct threats were made to her.

“Obviously it’s a fairly traumatic experience for her.”

About 5.30am police and paramedics wheeled out a man out on a stretcher with oxygen support who was sitting upright and conscious.

A large group of Special Operations Group officers accompanied another man to a nearby police vehicle.

Moments earlier armed tactical police could be seen entering the building, a popular restaurant on the bank of the Yarra River.

media_camera Forensic officers leaving the site, Picture Yuri Kouzmin

media_camera A staff member at Ludlow cleans the restaurant. Picture Yuri Kouzmin

media_camera A staff member cleans up at Ludlow after last night’s siege. Picture Yuri Kouzmin

Two angle grinders were also carried by police into the cordoned-off area.

Inspector McCarthy said the accused hostage taker was known to police but would not comment further as investigations were continuing.

“Certainly we’ve had dealings with him,” he said.

It is believed the man worked at Ludlow until as recently as last week.

A spokeswoman for Ludlow said the company will be releasing a statement regarding the siege later today.

“Both of our directors are overseas at the moment, but one of them has just flown back into the country,” she said.

Police have begun forensic investigations at the scene.

By 9.30am a police crime investigation team arrived wearing gloves and face masks and busily

photographed the scene.

Evidence was collected in a large brown paper bags.

Earlier several shocked kitchen staff who work at Ludlow arrived after the siege ended to begin their shift only to be met by police.

They did not know the identity of the victim.

“We haven’t talked to anybody yet,” one employee said.

“We don’t really know — we’re just trying to get in.”

Frustrated, they were left standing in the cold outside the restaurant.

The Ludlow will remain closed this morning as police continue their investigations.

It is not known when the venue will reopen.

Staff at the next-door World restaurant are putting out chairs and tables for the day’s trading after requesting police remove crime scene tape to allow workers into the rear of the building.

Suppliers arriving at Ludlow with trolleys of kale and fresh vegetables have been denied entry and forced to leave their goods by a side door.

A nearby Southbank worker, who asked they not be identified, said he was surprised that the man responsible for the standoff was said to be a former employee, adding: “A friend of mine worked there before and he really loved the place.”

Authorities were called to Riverside Quay about 10pm after reports a man had begun making threats.

The man barricaded himself in a part of the restaurant, now known to be a storeroom, with the woman.

Witnesses said they saw police storm the area with shields about 10.40pm.

Police extended an exclusion zone around the siege site, closing Riverside Quay to traffic and pedestrians between Cook St and Southgate Ave, which remained in force until early this morning.

The Southbank promenade between the ‘love lock’ bridge and the Ludlow restaurant was cordoned off.

It is believed the woman’s boyfriend and workers from the restaurant were waiting at the scene and watched as police negotiated with the man.

The incident was not believed to be ideologically motivated.

Cristina Grimaldi, who lives five minutes walk from the promenade, described the scene as like “a movie”.

“We were walking home and we saw the cops and we wondered what happened,” she said.

“It is the first time we have seen so many police.”