(Sharecast News) - The tribulations facing Amigo Holdings took a fresh turn on Monday after the troubled lender revealed it had entered into an asset voluntary requirement with the City regulator.
Under an asset VReq, assets are not allowed to be transferred out of the company, including paying dividends or director bonuses, without prior approval from the Financial Conduct Authority.
According to FCA guidelines, VReq powers are used "where we suspect serious misconduct may have occurred and harm needs to be prevented immediately".
Amigo insisted the VReq would not affect the day-to-day running of the firm or its ability to continue paying down debt.
"Amigo has adequate liquidity to continue to fund operations and support its customers," it said. "The board continues to be focused on address Amigo's legacy issues, restoring confidence in its corporate governance and building a sustainable business for the long term."
Its share price fell heavily, however, and by 1000 BST was off 10% at 9.39p, having earlier touched a low of 8.3p. A year ago Amigo's shares were trading at more than 70p.
Amigo, which lends to people with poor credit scores as long as a friend or family member acts as a guarantor, floated in 2018. It initially grew rapidly, but has since been hit by a surge in customer complaints and increased regulatory scrutiny. The FCA launched an investigation over how it assesses the creditworthiness of potential customers in May.
It has also been embroiled in a bitter dispute with James Benamor, who founded the firm in 2005. The one-time majority shareholder wanted to return to the board and oust existing management, who he believes have mishandled customers complaints and regulatory concerns.
His last attempt to take control was voted down in the summer. A new chief executive was announced - Glen Crawford, who was in charge during the firm's flotation - only for him to quit shortly afterwards, following a dispute with the board.
Turnaround specialist Gary Jennison has since been installed as chief executive.
(Sharecast News) - The UK High Court gave the green light overnight for Amigo Holdings's creditors to vote on the guarantor lender's proposed scheme of arrangement.