Member Info for Jonno41

https://www.financial-ombudsman.org.uk/files/303524/Financial-Ombudsman-Service-letter-re-Amigo-scheme-2021-vote.pdf

There is no way now the scheme will be blocked by the FCA

IMO

Yes, the FOS have voted to approve the scheme - but apparently this as a creditor and not sla judgement on how fair it is

Big seller I would say - probably MIC - buys coming in thick and fast and price dropping.....

I think there’s a fair chance of that franky

Mic selling shares, Byrook buying instruments... how dos that work ? Anyone care to enlighten me?

There might be a positive RNS before the 19th - the FCA have listed their concerns and some of them can easily be adhered to - for instance one point they highlighted is around Amigo paying all claims under £100 without investigating - they can fix that by investigating all claims.

They could also add top the pot and increase the % profits - a harder one to do but they must of considered this. There are other points around excluding votes of customer who do not have a valid claim 0 another easy one I'd imagine.

If this was me, I would be offering a counter proposal to the FCA in return for them dropping their opposition. And the FCA might well accept this so they can say they have an improved deal for consumers.

If Amigo do not counter propose, theh either know they'll win or they think whatever they suggest FCA will still apoint counsel and oppose the sanctioning of the scheme....

Always as risk though, but thinking through different scenarios sometimes helps.

GLA

I'd be cautious with that strategy, the SP might likely spike after the court case and comeback if the FCA impose a large fine or other restirctions on Amigo. Unfortunately its not as simple as get the sanction and the SP wil come an unstoppable force.

There are many more hurdles which can bring it up and down.

Saying that, the last court case did not cause the sp to rise immediately so there is an arguement to say you might be able to sell before and buyback after at a similar price and avoid the risk of the sp dropping to FA.

So perhaps theres a good change your strategy will work

GL

13:39:39 23.0846 4,752,690 1m
13:39:39 25.4381 3,261,822 829.75k

https://www.fca.org.uk/publication/correspondence/fca-letter-concerns-amigo-loans.pdf

I have just reread the original letter sent to Amigo from the FCA before the first hearing.

First, I noted that the FCA appearing by counsel for the hearing, does not mean that will not support the scheme (as the regulator) if it is passed, appearing in court is more about the court hearing the objections the FCA have about the scheme rather than any further regulatory action down the road.
Secondly, the FCA are judging this scheme by their guidelines, which are different from the legal guidelines – so the court should not find them legally relevant.
Thirdly, the main objections are around the fairness of the scheme are treating customer fairly, the latter objections mainly can be conceded by Amigo – for instance they had planned to pay all claims under £100 and investigate all claims over £100, that is not “fair” under TCF guidelines, and a few extra admins could investigate all claims whatever the amount conceding this point. There are a few other points around customers not responded because they are being contacted by the scheme – a company they have not heard of – and the fact redress does not have to be paid if consumer’s (for instance with existing loans) do not interact with the scheme. Also, some people will vote without redress and so technically their vote should not count – all of these is about TCF and some may be able to be rectified easily if it was deemed important.

Finally, the other point is around Fairness. The FCA does not deem is fair that customers are having to settle for a fraction of their total redress and the bondholders and shareholders are not having to contribute to the scheme. Shareholders are in the form of lower dividends and lower re-investment income to the tune of 15% per year, but that is not guaranteed and the FCA does not appear to think it is enough. Bondholders I think will be paid back in full and again the FCA are saying its not fair to make customers pay and not bondholders – I sort of get this although obviously the company are paying into the scheme at the start and each year into it so there is money coming from shareholders (although not from Bondholders)

My conclusion is the court won’t care because the FCA concerns for opposing the scheme are FCA guidelines not legal ones, but I do think Amigo might want to consider perhaps giving something extra to the FCA as they will be regulating us.

GLA

Definitely!

This would suggest the FCA may have completed the investigations on Amigo loans and as part of it found the scheme to be unfair. It is possible that Amigo could adjust the terms to make te scheme fair in the eyes of the FCA and they would drop their opposition. But it could also mean that if the investigation is complete they could lift the VREQ - and agree the future lending approach.

This might turn into a positive - we could revcive an RNS saying that Amigo has amended the terms of the scheme, the FCA have dropped thier opposition, and if approved by the courts agreed to remove the VREQ and have approved the future lending approach to allow relending to recommence after the 19th.....

If you read the FAQ's it does look like the investigation into the scheme and relending approval are related.

Obviously I am making alot of presumptions, but if this was all negative from the FCA why call, why not just stick in an email.....

Finger crossed time...

I assume the letter from the FCA is regarding the outcome of the Section 166 report as mentioned in the FAQ's on the Amigo website https://www.amigoplc.com/investors/investor-faqs

Where has such volume come from? On the face of it, it looks like some large holders offloaded and lots of PI's top sliced, but crikey 100M shares. Did we see lots of traders, selling early doors and buying back sub 20... although was it easy to buy back sub 20.

Could MM's have stop lossed huge amount of PI's in the teen's to fill order in the 20's?

No clue... Will be interesting to see what the large holders do now. I would of loved to be a fly on the wall when the FCA called GJ. What was said? Did the FCA say they have to oppose the scheme to stop all the other companies copying the model, did he say increase the numbers and we'll drop our opposition? He surely won't try to bring the company down by forcing them into administration..... But they must have an goal, or they would not have sent this letter.

I reckon, the FCA called CJ and said expect this letter, commit to the following and we'll drop our opposition. That way the FCA can keep face, walk away saying they've got an improved deals for consumers and Amigo get the SOA and does not end up in administration.

Of note, the RNS did not warn shareholders of the threat of administration, nor did they provide any comment whatsover, which suggests to me their will be further news before next Wednesday - it would be normal in these types of RNS's to say something like "shareholders should be aware that if the scheme is not passed by the courts there is a risk that the company will file for adminstration"... instead they gave the results of the vote...... more to come I think (and frankly, hope!).... FCA as far as I know do not force companies out of business, especially one that have sorted themselves out under new management and appear to be doing the right thing.

I still wonder if this has come out of the blue to Amigo or whether it was expected. The same day the vote is approved FCA oppose the scheme.... Seems strange timing...

I suspect this will get through the courts whether the FCA are their in counsel or not, question is should Amigo give a little bit more to derisk this event (if thats possible) or should they hold their position under the basis that this opposition has come too late in the day - i.e. the votes have been cast, and it is truely unfair to tell 75K yes voters, the FCA opposed the scheme so you now get no comp..... FCA could not do that, so I imagine their counrsel will argue for more redress payments for the consumers - not halt the scheme and see the all with no comp... other factors to play here as well... FCA surely want the likes of Amigo lending rather than less responsible lenders, so it does not seem to suit the FCA to stop the scheme, which si the biggest risk.... I also imagine that Amigo could give a bit more without much/any impact to the SP, as long as its a sensible amount.

Still worried though

It's timing Franky. that's all - if the SOA fails, there may be no Amigo, no LTIP's no board etc. as son as the SOA is approved, futures cemented and LTIP's should then have been announced.

No issue getting talent on that basis.

I've always said LTIP's were a mistake - not awarding them, but doing so before the court hearing. The press and MP's made a big deal about this, and frankly, so they should

The focus of Amigo up until the 11th should be 100% redress (or at least thats how it should appear).

I emailed them months ago and told them to scrap them.....

Needless to say, did not get a response :)

I was tempted to sell some shares jsut now, but then again I thought what can the FCA do? The vast majority have voted for the scheme, stop the scheme and no one including themselves get any money.

They cannot stop the scheme being sanctioned, if they go to court and argue there should be more to impact on shareholders - how much more do they want? a better RNS would have been " the FCA oppose the scheme because they feel the pot needs to be bigger and suggest that the % profts and contributions increase to xxxx". Additionally the letter they sent yesterday has the same sentiment as the original letter that was read out in court, the only difference is they have changed thier stance from not opposing to opposing - the only thing that has changed since the court case is the results of the vote (not know presumably when the FCA sent the letter) and the share price. Therefore one assumes the FCA did not like the share price going up after they decided not to oppose the scheme..... so they've changed thier mind....

If that was the case, Amigo could have responded positively or negatively and possibly agreed to meet the FCA demands before the court case. Instead, the FCA have inserted unfounded uncertainty.

I really cannot help but feel this RNS was deliberatly intended to lower the share price before the court hearing, to show a smaller return for shareholders.

However a bit like the FCA allowing CMC's to profit from claims for years - (taking money away from consumers), this RNS has simply allowed MM's to get shares on the cheap and a bunch of nervous PI's to lose money allowing their chares go to the II's......

Also I'm nervous now...

GLA

One promise I wish I kept!!! Did the MM's really manage to stop loss people out of shares below 18p!!!! Crazy stuff.

Another shocking badly written article, wirtten by a content agency no doubt