The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
And they’re not fake claims. The board ADMIT they owe hundreds of millions of pounds to customers for bad lending. Amigo’s own scheme expects to uphold 60% of claims. The claims are valid, and James Benamor told everyone about the risks in March 2020, and reinforced the risks by selling out when his JR plan was rejected (by shareholders!)
IK, any investment is risky. But anyone who has invested within last two years has known - or ought to have known through the most superficial due diligence - that this was a casino share.
If people have invested childrens savings or pensions then I’m sorry for them. But it was stupid to invest anything here you weren’t prepared to lose and there’s nobody else to blame.
Kick - if you have to explain the joke, you’ve missed your mark.
Noble Peasant - I agree with you. The board in particular, who have coined in FTSE 100 salaries and rewarded themselves with highly lucrative LTIPs, has behaved in a very distasteful way. It’s an entirely personal opinion, but I think Gary and team gave the FCA no choice but to oppose the scheme given they announced several LTIPs between during the time AFTER the announced wanting a scheme but BEFORE getting it through court. I said loudly at the time that such antagonistic behaviour was not in the interests of shareholders.
Unfortunately, many shareholders revelled in their expected (but delusional) multibag at the expense of customers. I have very little sympathy for that particular group, who are now getting a taste of the medicine they were only too happy to inflict on vulnerable customers.
I’m saying all the talk of parties in Switzerland and trips to Vegas (Epstein style or not) was pretty repellent when it came attached to vulnerable customers taking a 90% haircut. Kick is obviously a particularly brain dead and shameless wazzock for his reference to Epstein but there was widespread salivation at the idea of making a killing by inflicting huge losses on vulnerable customers and it left a nasty taste in the mouth.
And yes, vulnerable customers. Nobody who is financially strong would need a guarantor or pay 50% interest. And Gary constantly talks about Amigo being essential because it lends to people who can’t get a loan from a mainstream bank.
Well, I think your post says it all. Shareholders and execs living large whilst inflicting huge losses on vulnerable customers was never a good look or a good plan. And despite many people’s determination not to see what was going on, eventually the smoke blowing came into contact with reality.
And your message stinks. Epstein style party? Have a word with yourself.
If not Mark, can anyone else tell us what rules the FCA has applied retrospectively?
I’ve been researching and the last major rule change I can find is from 2015 when FCA said lenders had to treat guarantors like borrowers and do an affordability assessment. According to FCA, lenders were saying they already did that anyway so it wasn’t anticipated that there would be any impact on firms.
In any case, most complaints are from borrowers so that rule change had no impact on checks required for that group.
I would have thought retrospective application of new rules was a shoo-in for a successful judicial review. So unless someone can tell us different, looks like the “new rules applied retrospectively” excuse is a red herring and that’s why the JR strategy has never been pursued by any of the lenders that have gone bust / tried a scheme.
Successive management teams - including Gary’s - don’t dispute that Amigo owes hundreds of millions of pounds to customers. They wouldn’t do that if it was based on rules that didn’t apply.
Shareholders themselves were given not one, but TWO votes on Benamor’s attempts to put his own team in charge so that he could JR the FCA. They voted against every single one of his motions.
So, anyone still holding today either held their stake despite that defeat or bought in / topped up AFTER it was clear that Amigo accepted fault. As we know, Benamor got out.
The FCA undoubtedly have questions to answer, especially when you put guarantor loans in the context of all the other high cost credit firms who have collapsed due to poor affordability practices - Wonga, Brighthouse, Provident home credit, Sunny, Money Shop etc.
Whether they were at fault for approving in the first place or whether it’s a failure of ongoing oversight as practices evolve is another question. But something has clearly gone wrong at the regulator somewhere along the way.
I make this at least three:
https://www.mirror.co.uk/money/tfs-loans-collapses-administration--26198197.amp
https://www.fca.org.uk/news/news-stories/tfs-loans-limited-enters-administration
I think that falls into the “stubborn refusal to see what’s staring you in the face” category. Certainly, any post that, after everything we’ve seen, rounds off with an expression of blind faith in Gary looks pretty feeble.
The court wanted to see shareholders take some pain and Amigo will need to set out how that’s achieved for the court. It’s doing that now. The 24 January RNS says
“If shareholders do not approve the rights issue, the New Business Scheme will revert into a wind down under which the shareholders will receive nothing in respect of Amigo Loans Ltd.”
Best of luck LTH.
Franky, I agree that this should sail through the vote and the court. But Amigo are making the scheme and new business dependent on the rights issue. That’s the tricky bit. The last we heard in an RNS was that they wanted to raise “at least £70m” of new equity. That would mean shareholders (or someone they sell their rights to) putting in 15p for every existing share. Will that pass? If not, Amigo is in wind down.
I mean stop talking about Amigo as though it’s some kind of social enterprise or charity. It isn’t. It’s not motivated by financial inclusion, it’s motivated by profit.
Financial inclusion is, at best, window dressing. “Serving excluded customers” is a euphemism for giving expensive credit to poor people because they’ve got nowhere else to go (and still charging high amounts of interest even though there’s a guarantor to call on if things go wrong).
You didn’t swallow the spin, did you? If you want to know Gary’s feelings about the customers, look at what he offered them in Scheme 1 whilst giving himself and his team juicy LTIPs.