Cattles future rests with its lenders

THE future of Cattles, the troubled doorstep lender, is likely to depend on lengthy negotiations between its banks and bondholders.

During the Yorkshire-based finance group’s three-hour AGM this week chairman Margaret Young revealed that a whistleblower had brought to light concerns about its finances which have since shown that the group has an £850m black hole in its accounts.

Observers say that the future of the business, which had its shares suspended in April, will depend whether the group’s bondholders, which are owed £850m and whose trustees are headed up by HSBC, can agree a way forward with its syndicate of 22 banks led by Royal Bank of Scotland, which are owed £500m.

It is estimated that around 50% of Birstall-based Cattles’ shares are now held by private shareolders.

Shareholders were told that an investigation into Cattles’ accounts by law firm Freshfields Bruckhaus Deringer and business advisers Deloitte has cost up to £5m so far.

The Accountancy and Actuarial Discipline Board has launched an investigation into PricewaterhouseCoopers as auditors to Cattles.

Ms Young has stepped into the role of executive chairman following the departure of chairman Norman Broadhurst and chief executive David Postings who left the group at the start of this month.

At the same time six senior Cattles executives who had been suspended until a forensic review of its accounts was completed, had their jobs terminated with immediate effect.

Finance director James Corr, chief operating officer and Welcome chairman Ian Cummine are among the sacked senior staff members.

Mark Collins, treasury and risk director also left the company with immediate effect.

None of the departing executives received any compensation for loss of office.

Yesterday shareholders backed the re-election of directors including David Haxby, the senior non-executive director and former Arthur Andersen partner.

Retired financial journalist Douglas Moffitt, who has worked on programmes on Sky, LBC and Thames TV and who holds shares in Cattles, travelled from London to attend the AGM.

He said: “The mood of shareholders was a combination of anger, frustration and betrayal. But the current board have a vision for the future and the feeling was that they should be supported so they can get on with the job.”

Another shareholder said: “I hold paper that is worthless at the moment. Two-and-a-half years ago this was the 167th largest company on the British Stock Exchange.”