Monday 1 June 2020 10:58 am

FCA launches investigation into troubled subprime lender Amigo Loans

City watchdog the Financial Conduct Authority (FCA) has opened an investigation into subprime lender Amigo Loans, the company said today.

In a stock market update, Amigo said the FCA started an investigation on Friday into whether Amigo’s creditworthiness assessment process and its governance oversight of this was compliant with regulations.

Amigo said the FCA investigation will cover the period from 1 November to date.

Amigo said last week it was in discussions with a potential buyer of the business. It said today talks are ongoing but said there “can be no certainty that any offer will be forthcoming nor as to the terms on which any offer will be made”.

Separately, Amigo said today it had started legal proceedings against the Richmond Group, one of its shareholders.

Amigo said it had filed an application today with the High Court for an injunction to prevent Richmond from voting in favour of the resolutions to appoint Sam Wells and Nick Makin as directors of Amigo and to remove each of the current members of the board in the upcoming general meeting to be held on 17 June.

The company said all directors have made clear that they are willing to step down provided it is by way of an orderly succession, but said it “has been left with no option but to take legal action against Richmond following its continued refusal to abide by the terms of the relationship agreement entered into between Richmond and Amigo on 29 June 2018”.

Stephan Wilcke, chair of Amigo, 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 is a publicly listed, regulated company, not a wholly owned private subsidiary. We are duty bound to protect the interests of all shareholders and to prevent a majority shareholder acting in breach of the relationship agreement.”

Amigo’s share price was flat at 18p this morning.

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