Amigo Loans Founder Seeks To Return As Chef
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James Benamor, the founder of struggling risk lender Amigo, called on the company to appoint him as the group’s chief executive, just two months after a vicious battle with the management of the company led him to relinquish most of his majority stake
In a blog post published on Friday evening, Mr Benamor said he wanted to return to the company to lead international expansion while battling what he described as “unethical” UK authorities.
Under his proposed plan, outgoing Managing Director Glen Crawford would remain in charge of Amigo’s UK-regulated subsidiary, Amigo Loans Ltd, with a focus on cost reduction, reduction of debt and the launch of a judicial review of how the Financial Ombudsman Service handled customer complaints. .
Mr Benamor, meanwhile, would run his ultimate parent company Amigo Holdings and set up new businesses in markets which “unlike the UK regulated market enjoy a fair and stable rule of law”. Mr Benamor previously announced that he plans to establish an international rival with Amigo after stepping down from the company’s board for the first time in 2018.
Amigo dominates the UK secured loan market, offering loans to people with poor credit histories on the condition that a friend or family member agrees to step in if a borrower does not repay. It grew rapidly after a series of regulatory crackdowns on other subprime loan models such as payday loans and rental retailers with an option to buy, but began to be the subject of increasing regulatory oversight last year.
Amigo tried to anticipate a regulatory crackdown by tightening its approach to risk and reducing its dependence on recurring borrowers. However, Mr. Benamor accused him for knowingly making reckless loans without standing up to the FOS, which he says has encouraged consumers and professional claims management firms to make fraudulent claims against lenders.
The pressure from the increase in customer complaints has been exacerbated by the impact of the coronavirus crisis, which forced Amigo to put most new loans on hold earlier in the year. Last month he warned that there was “material uncertainty”On its ability to continue to function.
Mr Benamor failed in his attempt to oust the entire board of the company in June, but chief executive Hamish Paton and chairman Stephan Wilcke had already agreed to leave the company.
Mr Benamor pledged to sell his 61% stake in the company after Amigo’s other shareholders rejected his proposal for a new management team. However, he said he would be ready to reinvest and “play a part in the turnaround” after the company re-appointed former chief Glen Crawford last month.
Amigo’s shares slumped from a peak of 108p shortly after its IPO in 2018 to a low of 1.8p earlier this year. Stock has picked up in recent weeks since Mr Benamor hinted he might return to the company, and shares rose 8% to 17.8p on Friday ahead of his announcement.
Mr. Benamor asked Amigo to give a public response to his proposals before the talks began on Monday. The company did not respond to a request for comment at the time of posting.