The chief executive of troubled lender Amigo Loans has resigned.
The Bournemouth-based company is in the process of winding down ahead of being liquidated, having halted all lending in March. The firm had been facing financial difficulties after being ordered to make compensation payments to former and current customers over historical complaints.
After it was unable to meet the terms of a High Court scheme, Amigo said it had been forced to use its "fallback option" and would wind down the business and use the money to pay off customers who were due redress.
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In an update posted on the London Stock Exchange on Tuesday (May 16), the listed firm said Danny Malone would step down from its board of directors. Mr Malone joined as chief financial officer in February 2022, before becoming chief executive last September.
Amigo said Mr Malone will serve out a six-month notice period to ensure the continuation of the solvent and orderly wind-down of the business.
Mr Malone said: "I would like to thank our teams who have shown remarkable resilience and commitment over what has been a very challenging period and to everyone for the culture we have built in such difficult circumstances.
“Unfortunately the investment market, particularly into the sector in which Amigo operates, was extremely difficult and we were unable to raise the capital required. As a result the business is in wind down, which will have progressed enough over the next six months for me to hand to others to complete."
The chair of the company’s board, Jonathan Roe, added: "Danny was a tireless leader of the executive team in our search to secure commitments for new financing for Amigo, which unfortunately proved impossible to secure. He was also integral to getting our RewardRate product into the market. As Amigo is now required to wind down under the terms of its scheme of arrangement, Danny's resignation is another sad day for the group."
Bournemouth-based Amigo specialised in subprime guarantor loans - the type where a borrower's friends or family promise they will pay back the loan if the borrower cannot. Customers would borrow at interest rates of around 50%.
According to a decision from the Financial Conduct Authority (FCA), the lender "did not have appropriate processes in place to ensure it adequately assessed borrower and guarantor circumstances before approving a loan" between November 2018 and March 2020.
The regulator said it would have fined Amigo nearly £73m but decided not to because that would take away from the compensation customers would get.
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