The founder of struggling guarantor lender Amigo Holdings (AMGO) has threatened to liquidate his entire 60.7 per cent stake, if other investors do not vote to remove the current board at a general meeting on 17 June.
The latest twist in the company’s painful two-year history on public markets comes amid a volatile stand-off between controlling shareholder James Benamor and Amigo’s directors, who Mr Benamor has accused of marshalling the group’s “slow motion suicide”.
At the start of this month those directors – who are also attempting to sell the business – disclosed that the Financial Conduct Authority (FCA) has launched an investigation into whether Amigo’s creditworthiness assessment processes and oversight have complied with regulation. The probe will cover all lending activity from November 2018 to date.
Amigo’s board has at least cleared one legal hurdle, by getting Mr Benamor to agree to abstain from voting for the removal of the current board. The company had previously sought to block the founder’s vote via an injunction, arguing that a disorderly removal process would jeopardise its compliance with the UK Corporate Governance Code and FCA licensing rules.
However, Mr Benamor fired back with an ultimatum for remaining shareholders to back his proposed replacements or “unite around the team that lost 90 per cent of Amigo’s value in 9 months”. Should investors side against the founder, he has pledged to dispose of his entire stake.
“I will today put all of our Amigo shares into the hands of a broker, with non-cancellable sell instructions to sell 1 per cent of Amigo every trading day, starting the day after the vote, if the vote does not remove the current board in its entirety,” he wrote in a blogpost.
Amigo said it has contacted Richmond Group, Mr Benamor’s holding company, for more information and how this affects Amigo’s formal sale process.
