Amigo founder vows to dump entire stake if boardroom coup fails
The founder of Amigo Loans has vowed to sell all his shares in the high-interest lender if his attempted boardroom coup fails later this month.
James Benamor said his company, Richmond Group, which owns almost 61pc of Amigo, would sell its shares over a three-month period if the other shareholders do not back his bid to oust the current board and install his preferred replacements.
Selling the shares would generate about £51m for Mr Benamor based on Wednesday’s 17.8p closing price, which values the company at just £84m. That would be about £737m less than they were worth when the company first listed in London in 2018.
Mr Benamor said in a blog post on Wednesday: “I will today put all of our Amigo shares into the hands of a broker, with non-cancellable sell instructions to sell 1pc of Amigo every trading day, starting the day after the vote, if the vote does not remove the current board in its entirety.”
Amigo lends up to £10,000 to borrowers with poor credit scores at an interest rate of 49.9pc if they can find a family member or friend to guarantee repayments.
A long-running battle between Mr Benamor, a father of eight and self-confessed former petty criminal, is set to come to a head at a company meeting on June 17 to decide the fate of the board.
Richmond Group will be unable to vote at the meeting after Mr Benamor threw in the towel in a legal dispute with the lender.
On Monday, Amigo filed for a High Court injunction to prevent Richmond Group voting on the proposals to remove the current directors.
It claimed that by voting on the proposals Richmond would breach the terms of a relationship agreement entered at the time of the flotation.
Mr Benamor branded the legal action a “disgusting act of self preservation from a board which has hijacked a public company and is running it for their own benefit, at the expense of shareholders and customers”.
Explaining the decision not to defend the injunction application, he said: “Armed with a £115m fighting fund, they have no doubt hired the best lawyers in the country and will probably get their injunction on a technicality. This fight would burn our time and money whether we won or lost.”
Amigo chairman Stephan Wilcke said on Monday that the board members will leave the company, but that their departure must be part of an orderly process that would not risk the firm’s ability to conduct regulated activities as a lender or breach its corporate governance rules for listed companies.
Mr Benamor, who in March resigned from Amigo’s board for the second time, told shareholders they faced a choice between the values that turned a £100m investment into a £1.4bn firm and the current management team, which has overseen a collapse in the company’s value.
The crisis at Amigo deepened on Monday when it revealed the City regulator was investigating whether its process for checking customers’ creditworthiness is in line with the rules.
The company is in discussions with an unnamed potential bidder as part of a sale process it has been running since January. Industry insiders see the firm as a risky investment due to regulatory uncertainty.
Amigo declined to comment.
