(Alliance News) - Amigo Holdings PLC on Friday said Richmond Group Ltd, led by founder and former chief executive James Benamor, has withdrawn its resolution to remove Glen Crawford as CEO.
Guarantor loans provider Amigo added that it intends to post a notice of the general meeting requisitioned by Richmond to shareholders by September 17.
On Thursday, Amigo said it had received a general meeting requisition notice from Richmond for appointing James Benamor as a director of the company. The notice also proposed removal of Chief Financial Officer Nayan Kisnadwala, Interim Chair Roger Lovering, and Crawford as directors of Amigo and resolutions in relation to Amigo's unit Amigo Loans.
These come as the latest development in a series of events that began in April, when Benamor called for Amigo's entire board to be ousted after stating the company was "committing slow motion suicide". However, shareholders rejected Benamor's resolutions. Amigo and Benamor settled their dispute in June, with Benamor deciding to sell his entire 61% stake in the company.
Despite this, earlier in August, Benamor said he wanted to return to the company to lead an international expansion while fighting what he described as "unethical" UK authorities. Under his plan, Crawford would keep control of Amigo's UK-regulated Amigo Loans subsidiary, focusing on cost cutting and shrinking debt, as well as embarking on a judicial view of the Financial Ombudsman Service's handling of customer complaints. Benamor himself would take over parent company Amigo Holdings to build new businesses in markets that "unlike the UK regulated market, enjoy fair and stable rule of law".
In response, Amigo backed Crawford, urging Benamor not to waste time or money in his bid to return. Amigo said that while it agrees it continues to face significant challenges to ongoing operations, it believes the reappointment of Crawford as CEO is a critical step for the business in navigating through its issues and returning the company to full health as quickly as possible.
Crawford returned as chief in August, a position he held from February 2016 but left in April 2019 in order to undertake medical treatment.
Crawford has made it clear to he is not prepared to work with Amigo in any circumstances where Benamor returns to Amigo's governance structure in a position of influence. Amigo has said that Crawford's decision to return as CEO was based on the clear statement from Benamor that he would completely sell down Richmond Group's stake in Amigo.
"In the event that Benamor elects to requisition a general meeting for shareholders to vote on his proposals, and should he be successful in gaining shareholder approval for his proposals, the board has agreed with Mr Crawford that he may terminate his employment contract immediately. The board is strongly of the view that such an outcome would be materially detrimental to the interests of the company," the company said on Monday this week.
"Crawford and the board are therefore equally aligned in their unanimous rejection of the views and proposals put forward by Benamor. The board therefore urges Benamor not to waste further time and expense for either Richmond Group or Amigo in seeking to bring his proposals to a shareholder vote," Amigo added.
Shares in Amigo were trading 13% higher at 13.55 each on Friday in London despite posting a sharp drop in first-quarter earnings after granting payment holidays to borrowers.
For the first quarter ended June 30, revenue was down 32% to GBP48.8 million from GBP71.5 million in the first quarter last year, and pretax profit tumbled to GBP1.4 million from GBP22.6 million. The company attributed the performance to Covid-19-related payment holidays granted to 47,000 customers and a temporary pause in all new lending activity.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Amigo (AMGO)