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FCA investigates Amigo as lender sues founder

By Sean Farrell

Date: Monday 01 Jun 2020

FCA investigates Amigo as lender sues founder

(Sharecast News) - Amigo said the Financial Conduct Authority was investigating its credit assessment process as the guarantor lender took legal action against its founder's company over an attempted boardroom coup.
The FCA launched an investigation on 29 May into whether Amigo's assessment of customer creditworthiness complied with regulatory requirements, the company said. The investigation covers the period from 1 November 2018 to now, Amig said.

Amigo revealed the FCA probe as it announced it was seeking an injunction against Richmond Group from voting in favour of appointing Sam Wells and Nick Makin to Amigo's board while sacking the current board. Richmond Group is owned by James Benamor, Amigo's founder, and holds a 61% stake in Amigo.

Benamor wants to install Makin as Amigo's chairman, Wells as chief executive and depose the existing directors. He has accused the board of committing "slow motion suicide" by continuing to lend irresponsibly while paying out refunds on past loans.

Amigo said on 27 May it had found an unidentified buyer for the troubled business. It said on Monday that Richmond's action violated its agreement with the company and that the board was seeking to act in all shareholders' interests. It said board members were prepared to stand down once replacements were found.

Stephan Wilcke, Amigo's chairman, said: "The board has offered to leave, and will do so, but it must be through an orderly process. We cannot risk the Amigo group's ability either to conduct its FCA regulated activities or to continue as a London-listed company operating in accordance with the UK corporate governance code.

Amigo put itself up for sale in January after regulators introduced tougher standards and customer complaints rose sharply. The company is the biggest provider of guarantor loans with repayments backed by the borrower's friends or family. It charges a representative interest rate of 49.9% on loans between £500 and £10,000.

Amigo shares fell 5.7% to 17.71p at 08:59 BST. The shares have lost 94% of their value in the past year as fears have increased about its survival.


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