Amigo loans has narrowly seen off a second attempt by founder james benamor to reclaim control of the group, with shareholders rejecting his bid to return to the board and oust much of its existing management.
Mr benamor has been locked in an increasingly vicious war of words with amigos management team over the past year, blaming them for mishandling a rise in complaints and failing to stand up to over-aggressive regulators.
Last month he said he wanted to take over as group chief executive, but about 57 per cent of votes cast at a general meeting on tuesday rejected his proposal to rejoin the board. his attempts to remove chief financial officer nayan kisnadwala and acting chairman roger lovering were also rejected.
Amigo acknowledged, however, that a not insignificant minority of shareholders had supported mr benamors efforts. it said the board is committed to its current governance structure and strategy, to delivering value for all shareholders and to ensuring an effective dialogue with shareholders going forward and will continue to engage with shareholders to understand their views.
Mr benamor said: whilst we didnt win, shareholders have sent a strong message today. protect shareholder interests, cut costs, rebuild value fast, or you will be replaced with a capable team.
Tuesdays vote was his second attempt to oust some of the board, following an earlier unsuccessful effort in june. on tuesday, however, he suggested he would not mount any further campaign for the time being, adding that we should give [new ceo gary jennison] the benefit of the doubt and allow him to show us what he can do.
Mr benamor sold his majority stake in amigo after the june vote, but had pledged to repurchase up to 29 per cent of the company if he was re-elected. shares in the company, which have lost more than 80 per cent of their value since the start of the year, fell a further 8 per cent on tuesday morning, to 11p.
Amigo dominates the uk market for guarantor loans, lending to people with weak credit files if a friend or family member agrees to cover repayments in the event of default. it grew rapidly in the run-up to its initial public offering in 2018, thanks in part to regulatory clampdowns on other areas of high-cost lending. however, it has recently drawn increasing scrutiny from regulators and professional claims management companies, leading to a surge in customer complaints.
The coronavirus pandemic has put further pressure on the business, forcing it to freeze almost all new lending and offer payments holidays to thousands of customers. in a trading update ahead of the general meeting on tuesday, acting chair mr lovering said the companys recent trading had been in line with management expectations.
He said the company had not seen a material change in complaint volumes, but said it was making progress with its handling of the complaints. amigo has made a number of updates to our processes to reflect the current regulatory environment as it prepares to restart new lending later in the year.