The chief executive and chairman of Amigo Loans on Monday said they will quit the struggling subprime lender after a boardroom shake-up saw the return of colourful founder James Benamor.
Chief Hamish Paton and chairman Stephan Wilcke will walk away from the group through an “orderly and staged process” at some point next year, the firm said. Another board member, pay committee chairman Clare Salmon, will also leave.
Benamor, who owns 61% of the company through his vehicle Richmond Group, has joined the seven-man board with immediate effect alongside another Benamor-backed appointee, Kelly Black. As top shareholder, Richmond has the right to appoint two people onto the Amigo board.
Amigo shares have crashed 78% since they listed on the stock market last June due to a raft of impairments booked by Paton, severely damaging Benamor’s fortune. The shares rose 4.5% to 63.3p on Monday amid claims from analysts the stock is undervalued.
Some speculated the shake-up was triggered by a spat between Paton and Benamor over the strategy of the company. A spokesperson declined to comment on the reason.
“We think that Benamor is unlikely to see eye-to-eye with Paton on strategy,” said Goodbody analyst John Cronin. “The bottom line is that the two men have clearly fallen out and the chairman is now a casualty for bringing Paton in or agreeing the strategy.”
Amigo has been under pressure over its business model, which loans to people with poor credit ratings if they can convince a friend or family member to stump up for repayments if they cannot repay themselves.
Regulators at the Financial Conduct Authority have taken a keen interest in the sector, which Amigo dominates, amid fears these guarantors are not given enough information.
“It has been fascinating and gratifying to lead the board of Amigo,” Wilcke said. “Clare and I will work with the board to ensure an orderly succession to take Amigo forward.”
Benamor featured in Channel 4’s Secret Millionaires series in 2008. He told the programme about his difficult upbringing in Bournemouth.
