1st Jun 2020 10:48
(Alliance News) - Amigo Holdings PLC on Monday said it has filed an application with the UK High Court of Justice for an injunction to prevent Richmond Group Ltd from voting in favour of resolutions to replace the entire board.
The subprime lender said that while all current directors are are willing to step down provided it is by way of an orderly succession, it has been left with no option but to take legal action against Richmond following its continued refusal to abide by the terms of the relationship agreement entered into in June 2018.
"The board has offered to leave, and will do so, but it must be through an orderly process. We cannot risk the Amigo group's ability either to conduct its FCA regulated activities or to continue as a London-listed company operating in accordance with the UK Corporate Governance Code. Amigo is a publicly listed, regulated company, not a wholly owned private subsidiary. We are duty bound to protect the interests of all shareholders and to prevent a majority shareholder acting in breach of the relationship agreement," said Chair Stephan Wilcke.
Earlier in April, Amigo said that Richmond Group - which holds around a 60% stake in the company - called for an extraordinary general meeting to propose a replacement to chair and chief executive officer. The requisition notice also proposed resolutions to appoint Sam Wells and Nick Makin as directors of Amigo.
Richmond's Chief Executive & Amigo founder James Benamor proposed the board changes as he said he could not understand how Amigo seemed to have such high redress rates, but was still paying out on target, stating on social media that he believes the company is "committing slow motion suicide".
In May, the UK Financial Conduct Authority said that new directors must have prior approval.
Separately, Amigo said that the regulatory body on Friday commenced an investigation into whether or not Amigo's creditworthiness assessment process and the governance and oversight of this was compliant with regulatory requirements from November 1, 2018 to date.
The company added that its formal sales process with its potential buyer and discussions regarding the terms of any offer are ongoing. Last Tuesday, Amigo said a suitor is preparing to announce a takeover offer, adding that the unnamed potential acquirer has completed due diligence and intends to offer 20.9 pence for each share of the company. The offer values Amigo at roughly GBP99.3 million.
Amigo shares were trading 0.5% lower at 18.68p each in London on Monday morning, giving it a market capitalisation of GBP88.8 million. Amigo floated in June 2018 at a price of 275 pence, giving a market capitalisation of GBP1.31 billion.
By Ife Taiwo; [email protected]
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