5 Reasons12 Sep 2020 21:38
From share buy website
The response from Amigo’s board on 11 September appeared disappointing. Portraying a metaphorical sinking ship with no captain at the wheel and endless chaos did little to inspire confidence in the aspirations of Amigo currently. Here’s why we think shareholders will ignore it and be inclined to vote yes for the resolutions proposed by Benamor:
1)CFOs and executive directors can be replaced. The current CFO was referred to as an ‘experienced CFO’ with a ‘deep understanding of the company and its current issues’ – one would hope so as a minimum! But is this not the same CFO who has been in the role for quite some time and overseen its spectacular fall from grace? Hardly instilling confidence.
2)James Benamor’s chance of not being appointed CEO if successful seem very slim. Regurgitating some fairly standard stuff in that he would have to be approved by the FCA and reassessed as being fit and proper for the proposed role just doesn’t cut it. With the backing of shareholders and having founded the company, one would like his chances of being appointed.
3)The company is very unlikely to be without a CEO for a prolonged period. It takes the FCA up to 90 days to approve by law, but there is also a rule that allows for temporary roles without approval for up to 12 weeks. There will be a captain at the ship!
4)They confirmed problems of their own doing as a reason to vote against a change in the board. A focus on the backlog of complaints and uncertainty around future complaints sounded very negative. Shareholders know the problems, the question is how the business will eventually move forward with purpose. There was also little confidence given in terms of how the board is dealing with the current issues and confidence to come out of this the other side.
5)Too many subjective ifs and buts. Language such as; this approval ‘may not be given’, ‘neither of these events may happen’ (in reference to James becoming CEO), may be ‘disruptive and damaging’ to the company and ‘may never materialise’ (the proposed share purchase). This is the type of language used throughout the reasons to vote against the resolutions by the board and is very subjective.
Encouraging shareholders to vote against the proposed resolutions because of fear of what may happen without the existing board doesn’t feel like a strong enough reason. It can be used by any poor-performing board or even manager to justify why they should remain and is the easy card to play.
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