committing slow motion suicide.
Benamor said the board needed to choose between challenging recent FOS decisions on affordability complaints in court by Judicial Review or accept that “almost all their loans had been made irresponsibly”, stop lending and go into administration.
When he came back onto the board, he says he personally audited the most recently lent and refunded loans. And he found that:
Amigo had, for six months, been lending almost entirely in a way that matched their own complaints team’s definition of ‘irresponsible’.
He described the company as being a:
cash cow for consultants, lawyers and suits, all of whom had an interest in keeping the gravy train running for as long as possible, but no interest in the company being honest with shareholders or customers about the situation it was in.
and said he could no longer remain on the board.
Amigo issued a Response to statement by James Benamor disagreeing with much of what Benamor said:
Mr Benamor’s statement contains several material inaccuracies and is fundamentally incorrect in a number of respects. Amigo does not accept Mr Benamor’s account of events…
The Company monitors its loan book regularly and has concluded, as part of its Q3 review process, that it does not have a systemic problem.
On 28 April, James Benamor published another blog that called for the removal of the entire Amigo board. saying:
Today, I have requested a shareholder vote to be held as soon as possible on the subject of removal of the current board. This vote will obviously take place remotely.
And he also proposes his nominations for CEO and Chair, saying:
A key responsibilities of the new board of Amigo will be to investigate, provide evidence to the regulator on, and in all likelihood take litigation action against, the outgoing board members. It is therefore absolutely not acceptable for the outgoing board to be involved in selecting their replacements.
On 1 June, Amigo announced:
- the FCA has started an investigation into Amigo’s creditworthiness assessments since 2018; and
- Amigo has asked for a court injunction to prevent Richmond Group from voting to replace the board at the vote which is being held on 17 June. Richmond Group is owned by James Benamor and has more than 60% of the shares.
The previous week Amigo had said:
- We have significantly increased our staffing and recently agreed a Voluntary Requirement with the FCA to work through and reach a decision, before the end of June 2020, on a backlog of complaints which have arisen principally in 2020. Each complaint will be assessed on a case by case basis to ensure fair outcomes for our customers.
- it had a cash balance of over £115 million as at 25 May 2020.
At the General Meeting held on 17 June, the resolutions to remove the current board and substitute two new directors as proposed by James Benamor were all defeated by a large majority, about 9:1.
So the existing board members remained in office and Benamor had started selling 1% of the company’s shares every working day. He had previously stated this would continue until his holding is gone. This continued through July, August and early September.
On 24 August, Benamor set out his vision for Amigo in another blog: Richmond Group has been clear that we welcome and support the return of CEO Glen Crawford, setting out the Board changes he wanted, saying he wanted to become CEO of the group holding company and:
As CEO of Amigo Holdings PLC I plan to support the board of Amigo Loans Ltd in their strategy of cost cutting, bond buy backs, debt clearance, and Judicial Review of FOS decisions, whilst simultaneously rebuilding a team at Group level that is able to use the cash immediately returned to Group to build stable profitable businesses outside of the FOS and FCA policies which have so harmed U.K. consumers.
On 4 September, Benamor published the following tweet:
Excerpt of the important terms from the irrevocable contract I have today signed with our broker. pic.twitter.com/VEWfrhDVms
— James Benamor (@JamesBenamor) September 4, 2020
This was an incentive for shareholders to vote for his resolutions by promising at a time when the share price was under 13p that if he became CEO he would buy shares up to 30% of the company at a price of up to 20p.
On 7 September Amigo announced an EGM would be held on 29th September to vote on Benamor’s resolutions and set out why the Board thought they should all be rejected.
On 11 September Benamor’s shareholding holding was down to zero.
On 22 September, with a week to go until the EGM, Benamor published another blog: Gather round kids, I’m going to tell you the story of how Glen became CEO of Amigo the first time. But first, I need to take you back further, to the 00s.
It’s a fascinating insight into how he sees the development of Amigo, from losing the entire board in a week to cocktails designed for women to drink. It concludes:
“Vote for a new Amigo that is like the old Amigo. Don’t let anyone tell you this time things are different, because no one knows better than the current board, things are very very similar to the moment they themselves arrived into this story.”
This was followed the next day by an RNS from Amigo: Update on CEO Succession which said:
Glen Crawford has notified the Company that he no longer wishes to re-join the Board… Mr Crawford’s unexpected withdrawal of his candidature follows a divergence of views with a majority of the Board.
29 September – Benamor loses the vote
Benamor lost the vote at the General Meeting to be appointed a direct by 43% to 57%.
The Board commented:
The Board notes that while all the resolutions proposed by Richmond Group Limited at the general meeting were voted down by the shareholders, a not insignificant minority of shareholders did not support the Board’s recommendation that shareholders vote against all the resolutions. The Board is committed to its current governance structure and strategy, to delivering value for all shareholders and to ensuring an effective dialogue with shareholders going forward and will continue to engage with shareholders to understand their views.
For details of the latest Amigo news, see Amigo’s new Scheme