Evil Diaries: A Friend In Need Is Not Necessarily A Friend Indeed

Amigo (AMGO) was founded by a Mr Benamor. AMGO offered guarantor loans which although very expensive are at least available. Mr Benamor’s point is that there are always plenty of borrowers where in practice a significant proportion will not repay. And the way round is to ask the borrower to come up with a guarantor.

(Some will point out that these high rates of interest loans should be banned altogether. But this supposes that there is a practical alternative to illegal loans extended by strong arm tacticians. There is nothing of the sort. So that sweet expression of sympathy is clearly merely virtue-signalling.)

Back to AMGO: Mr Benamor sold out at the top pocketing a very large sum and then came the deluge in that it transpired that the borrowers’ guarantors had not had the transaction explained in detail. This had the effect of rendering any advance uncollectable. Even though I suspect that in many – perhaps most – cases both borrower and guarantor knew perfectly well what they were doing.

The management set about getting all the various parties squared up and it was then that the FCA intervened and saw the matter in front of a judge. This delightful chap took a very long time to come up with a judgement that could not work during which AMGO haemorrhaged cash thus making a rescue rights issue impossible.

Today AMGO is floundering to insolvency. So the score is Common Sense 0 Regulators less than 0. Justice and wisdom? I doubt it.

I would be surprised if this morning’s RNS from AMGO which discloses an approach for the rump of the business leads to any current shareholder value. We’ll see.