Cattles shareholders call for resignations
A GROUP of Cattles shareholders, angered by the way the beleaguered sub-prime lender is being run, have renewed calls for its senior directors to resign.
More than 100 shareholders are understood to be backing a motion proposed by Ian Dearing for the company’s non-executive directors to accept their share of responsibility for the collapse of the Batley-based company.
Mr Dearing, who is based in Clitheroe, Lancashire, and who is a shareholder, wants the resolutions to be proposed at the group’s next annual general meeting.
A number of executives have previously been dismissed or resigned from the company.
Shareholders were told that the company’s creditors had rejected the idea of issuing a wind-up petition at a Cattles meeting last month.
The latest resolution states that shareholders backing it believed the conduct of the company’s non executive directors since January 1, 2008 had been “unsatisfactory” and not in the interests of shareholders.
It claims that NEDs “permitted accounting irregularities to go unnoticed and unchecked” and allowed shareholders’ stakes in Cattles to be lost as the company posted losses.
The resolution makes a fresh call for chairman Margaret Young and other senior figures to resign.
And it proposes that a new team of directors are appointed with the aim of investigating if shareholders are entitled to any compensation.
Mr Dearing said: “Over 130 shareholders have sent requisitions to Cattles for resolutions to be put at the AGM including that the chairman and non executive directors do not have the confidence of shareholders and should consider their positions with a view to resignation; appointing a director to look at available remedies against those responsible for the incorrect application of ‘impairment policies’; and not selling assets without shareholders approval.
“These shareholders, with an average shareholding of over £12,000 in the capital of the company, represent over 3% of the issued share capital of the company and have gathered together in less than a week over Christmas in response to the directors reaction to calls at the EGM to consider their positions.”
Shareholders have previously been told that the lender is unable to recommend a business plan to its financial creditors that would allow its Welcome Finance division to lend to existing or new customers.
Cattles enviages that collection could take two to three years and that during the period the group’s cost base will contract to reflect the reducing size of the loan book.
The group’s smaller businesses Shopacheck and The Lewis Group will continue to trade as normal. The board is still exploring the scope to develop these businesses further.
In November, Cattles revealed it made a £555.3m loss in 2008. Bad debt charges totalled £778.9m last year.
The lender also lost £374.4m in the nine months to the end of September this year.
In 2007, for which its results have now been restated, it made a profit of £22.7m, after earlier guidance of a £165.2m profit.
Last month the lender confirmed that it had secured a “standstill and equalisation agreement” (SEA) from its key creditors, the banks, bondholders and noteholders, who are owed around £2.7bn.
The deal will give Cattles a chance to restructure and means its creditors will not force it into administration or demand the cash they are owed until July 2011.
Cattles said the SEA meant the group would have a better chance of stabilising its financial position.
The group has been hit by accounting failures, which meant bad debts were not properly accounted for.
Cattles had previously warned it would need to make a provision of up to £850m for previously unaccounted bad debts, which it has now included in its accounts.
Shares in the firm were suspended in April and will remain suspended until further notice.
However, it said that shareholders should be aware that in view of the latest decision regarding Welcome and the substantial negative value of shareholders funds that its shares are likely to have “little or no value”.
