THE founder of Bournemouth’s loan company Amigo has quit the business and accused it of “slow motion suicide”.

James Benamor, believed to be Dorset’s richest man, resigned as a non-executive director of the company he set up 15 years ago.

His departure prompted speculation that he might be preparing a bid to buy the company, which was floated on the stock market in 2018. His investment vehicle holds almost 61 per cent of the shares.

Amigo recently put itself up for sale as part of a strategic review of its business. The company lends money at 49.9 per cent annual percentage rate (APR) to people who can find a guarantor to support their borrowing.

Writing on Medium.com, Mr Benamor, 42, criticised Amigo’s response after the Financial Ombudsman Service “changed their stance on irresponsible lending” last year.

He said the regulator’s change of position meant that loans to “virtually anyone” were deemed “irresponsible”. Ninety per cent of complaints about guarantor loans were upheld in 2019.

He said Amigo should either have challenged ombudsman’s rulings in court or stopped lending and put itself into administration after preparing to pay “well over £1billion of redress”.

“Instead, they began refunding almost all complaints received, but continued to lend on a virtually unaltered basis, hoping no one would notice,” he said.

He added: “During my short time back on the Amigo board, I have witnessed a company committing slow motion suicide, whilst playing out the script of Brewster’s Millions.

“Within one year of my stepping down from the board, the most efficient company in the FTSE 250 had become a cash cow for consultants, lawyers and suits, all of whom had an interest in keeping the gravy train running for as long as possible, but no interest in the company being honest with shareholders or customers about the situation it was in.”

He added: “I could not, in good conscience, remain on a board that is so thoroughly mismanaging a company that I love.”

Mr Benamor previously quit the board in 2018 and got back onto it last December.

Amigo said Mr Benamor’s statement “contains several material inaccuracies”

It said: “Amigo does not accept Mr Benamor’s account of events. Amigo remains fully committed to fulfilling all of its legal and regulatory obligations, and will continue to engage with regulators in an appropriate and constructive manner.”

It added: “Amigo rejects Mr Benamor’s binary analysis that Amigo either must take the Financial Ombudsman Service to a judicial review or that it has a systemic problem with its loan book. The company monitors its loan book regularly and has concluded, as part of its Q3 review process, that it does not have a systemic problem.”

Amigo recently announced it had set aside £18.7m for dealing with complaints.

Although the ombudsman’s approach “evolved” last year, Amigo was not informed of a specific change in its approach, the company said.

It added: “Notwithstanding the potential disruption to the company’s formal sale process and strategic review, the company intends to continue with the process. The company will update the market on this in due course.”