Amigo has announced the filing of an application with the High Court of Justice for an injunction to prevent Richmond Group Limited from voting in favour of a board takeover.
According to the guarantor loans lender, Richmond was planning resolutions to appoint Sam Wells and Nick Makin as directors of Amigo, and to remove each of the current members of its board.
The proposed takeover is being led by the company’s founder, James Benamor, who still owns around 60% of Amigo. He is reportedly seeking to oust the board over claims that the business has been “mismanaged”.
The board has made the consequent injunction application in order to ensure that there is instead an “orderly process” for the replacement of the board, and in accordance with the process mandated by the senior managers regime.
It claims that Richmond’s attempts to remove all existing members of the board and appoint its shareholder director nominees are a breach of the Relationship Agreement.
The directors of Amigo have said that they have “no desire or intent” to remain on the board once replacements have been found, in accordance with Amigo’s regulatory requirements.
In a statement, Amigo said: “All directors have made clear that they are willing to step down provided it is by way of an orderly succession and have no interest in prolonging their appointment.
“However, the board 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 between Richmond and Amigo on 29 June 2018.”
Stephan Wilcke, chairman of Amigo, said: “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.”
He added: “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.”
News of the injunction closely follows Amigo’s statement that confirmed that the FCA last week opened a probe into “whether or not Amigo’s creditworthiness assessment process, and the governance and oversight of this, was compliant with regulatory requirements.” The investigation will cover lending from late 2018 to present.