The spat between the founder of Amigo Loans and its current board escalated over the weekend after a blog was posted by James Benamor on 21 August slating the company’s practices and branding former CEO Hamish Paton’s tenure a ‘calamitous time’.
Benamor listed a number of proposals which included him being instated as CEO of the company’s parent group – Amigo Holdings PLC.
But today the board of struggling subprime lender Amigo Loans rejected the proposals outlined by Benamor and warned that his return to the business would be ‘materially detrimental’.
On Friday, Benamore penned a blog welcoming the return of the CEO Glen Crawford but pointed out that he his work cut out for him – which included, he believed, the ousting of the remaining board members who he claims mismanaged Amigo.
The Amigo Loans board is currently locked in a bitter dispute with its founder James Benamor who is accusing the guarantor lender of irresponsible lending. Benamor wants to return as the parent company’s CEO
He also recommended the cutting back on ‘unnecessary suits’ accused Amigo Loans of irresponsible lending – adding that it had ‘financially excluded millions of ordinary people’.
Amigo hit back with an RNS announcement today pointing out that Benamore’s blog was not issued through a regulated information service, highlighting that Crawford has made it clear that he is not prepared to continue to work at Amigo ‘in any circumstances where Mr Benamor returns…’.
What are founder James Benamor’s proposals?
James Benamor, founder of Amigo Loans, pulled no punches in his scathing online attack on the companies current board.
On Friday Benamor wrote a blog with the following recommendations:
- Replacement of Nayan Kisnadwala with a ‘capable CFO’ within the next 30 days.
- Immediate removal of Roger Lovering and replacing him with one of the remaining iNEDs as non exec chair
- Retention of Glen as CEO of Amigo Loans Ltd, the subsidiary of Amigo Holdings PLC
- He also recommended the formation of a ‘functional board’ of Amigo Loans Ltd which would comprise of Glen as CEO; INEDs Richard, Gary and Jonathan; and the new CFO. This UK board will discharge corporate governance functions expected by the FCA of an FCA Authorised UK lender
- The appointment of himself as CEO of Amigo Holdings PLC – the parent company
- Formation of PLC board comprising of himself as CEO, along with the new CFO, and iNeds Richard, Gary and Jonathan
The board additionally called on its founder not to push ahead with a series of proposals he made on Friday.
It said that James Benamor should not ‘waste further time and expense’ in calling a shareholder vote which could seriously shake up the way the company is run.
The Amigo board warned that Crawford, who joined the guarantor lender as chief executive this year in March, can leave the business if Benamor calls and wins the shareholder vote.
Benamor suggested in his blog that the board should appoint him chief executive of Amigo Holdings, while putting Crawford back in charge of its subsidiary, Amigo Loans.
Lack of support for Benamor?
In June, the founder said that he would sell his 61 per cent stake in the lender after losing a fight to remove several of its directors.
Only around one vote out of 10 among independent shareholders was cast in favour of Benamor and his company Richmond Group.
The board highlighted in its statement: ‘Mr Crawford’s decision to return as CEO was predicated on the clear statement from Mr Benamor that he was selling down Richmond Group Limited’s controlling shareholding in Amigo to a position of zero.’
The boards statement ended with it relaying its ‘unanimous rejection’ of the views and proposals put forward by Benamor.
Extension from Amigo lenders
The online slinging match follows the announcement last week that Amigo Loans got another extension from its lenders until December on a £250million finance deal.
It’s not the first time that Amigo had been given an extension. The lifeline extends the deadline, which was meant to run out last Friday after originally being extended for a few weeks.
The Financial Ombudsman Service has recorded a steady increase in complaints about Amigo – 94 per cent of which were upheld in the second half of 2019.
The company said it would provide an update on its handling of complaints when it announces its results at the end of August.
Last year, 317 new complaints were recorded between July and December 2019 – a 349 per cent increase from the 69 complaints recorded in the second half of 2016.