Struggling sub-prime lender Amigo Loans said today it had hired its former chief executive as a consultant to advise on its sale.
Amigo said Glen Crawford was joining with immediate effect “to assist the company with the strategic review and formal sale process”.
Crawford stepped down from the company in June for health reasons, but has been brought back to steer it through its current crisis.
Yesterday, Amigo’s founder and major shareholder James Benamor quit the board and delivered a withering attack on the company which he he accused of “committing slow-motion suicide”.
Benamor said Amigo “must immediately cease lending, collect in the book, pay down debt, and proceed directly to judicial review [of these decisions by the Financial Ombudsman Service].
Amigo, which put itself up for sale in January, responded saying that parts of Benamor’s analysis were “fundamentally incorrect”.
The lender’s shares plunged 34 per cent yesterday to 26p.
Benamor, who has a 61 per cent stake in the company, re-joined the business less than three months ago in a boardroom coup.
He established the company in 2005 and was appointed non-executive director in 2016, but stepped down from the role in September 2018.
Analysts speculated yesterday that Benmaor may launch a bid for the business.
Amigo offers high-interest loans to people with bad credit ratings, providing they can find a guarantor to take responsibility for the debt if they cannot pay.
The embattled firm has attracted the attention of regulators due to concerns that some of its customers would struggle to pay back their loans.
The FCA is currently reviewing Amigo’s system of allowing people to name guarantors as it is concerned that those guarantors do not know the risks when agreeing to the repayment plan.
Amigo makes unsecured loans of up to £10,000 with annual interest rates of 49.9 per cent.
Regulatory pressure along with a slowing economy has sent Amigo’s share price down more than 80 per cent in a year.