11th Sep 2020 10:44
(Alliance News) - Amigo Holdings PLC on Friday said shareholders should vote against resolutions put forward by Richmond Group Ltd, which has proposed a board re-shuffle.
The guarantor loans provider said the investment vehicle of its former chief executive James Benamor requisitioned a general meeting, proposing the appointment and removal of directors of Amigo and the appointment of directors to the company's subsidiary Amigo Loans Ltd.
Richmond Group proposed that Benamor be appointed as a director of Amigo Holdings PLC with immediate effect and that Chief Financial Officer Nayan Kisnadwala and Interim Chair Roger Lovering be removed as a directors of Amigo effective immediately. It also proposed that current Chief Executive Glen Crawford as well as Non-Executive Directors Gary Jennison, Richard Price and Jonathan Roe be appointed as directors of Amigo Loans.
However, Amigo objected to all of the resolutions, advising shareholders to vote against them all. It noted that if the resolutions are passed, the company would be left with no executive directors, adding that the lack of oversight and control would have a "significant negative impact" on the company.
Back in April, Benamor called for the entire board of the loans provider to be ousted, claiming Amigo 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.
As at Thursday, Richmond Group held a 2.7% stake.
In August, Amigo said it had received a general meeting requisition notice from Richmond to appoint Benamor as a director of the company. The notice also proposed the removal of Kisnadwala, Lovering, and Crawford as directors of Amigo.
However, Amigo responded by backing 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.
Richmond has withdrew its resolution to oust Crawford as CEO.
In September, Amigo re-confirmed that 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. The company had previously 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.
Amigo highlighted that Benamor's recent offer to buy 29% of its shares at up to 20 pence per share may never materialise as it is conditional on a number of third party actions, but significant damage will have been done to the company if the resolutions are passed.
On Monday, Amigo said Richmond's recent offer to start buying shares is conditional on Benamor becoming CEO of Amigo and not on his election to the Amigo board, adding that even if Benamor is appointed to the board at the upcoming shareholdere meeting he will not automatically be made CEO.
"His appointment to the position of CEO requires the approval of the board of Amigo and the subsequent approval of the [UK Financial Conduct Authority]. There is no guarantee approval will be granted," Amigo noted.
Amigo further highlighted that Richmond would in any case need FCA approval to acquire 20% or more of Amigo and become a controller of a regulated entity, with no guarantee of approval, which would limit the Richmond share purchase to up to 20%.
The general meeting during which the resolutions will be voted on has been scheduled for September 29.
Shares in Amigo were trading 0.6% higher at 13.74p each on Friday morning in London.
By Ife Taiwo; [email protected]
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