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March 11, 2009

Cattles suspends more directors

by Gill Montia

Story link: Cattles suspends more directors

Cattles has breached its banking covenants and suspended three more directors.

Last week, the sub-prime lender, which operates under the Welcome Financial and Shopacheck brands, announced that the managing director of Welcome Financial, John Blake, finance director, Peter Miller, and operations director, Mick Belcher, had been suspended.

In January the firm reported that pre-tax profit for 2008 would be in line with market expectations of £174 million but that deteriorating trading conditions would have a negative impact on profitability in 2009.

However, the lender warned last week that publication of its full-year results for 2008 has been delayed and has followed up this statement by saying that it plans to restate its 2007 figures, after reporting a 25% rise in pre-tax profit for the year.

Cattles has now suspended Welcome Financial’s chairman and chief operating officer, Ian Cummine, and the unit’s compliance and risk director, Adrian Cummings; the finance director of Cattles, James Corr, is also being suspended.

Further news about the fate of the directors is not expected until the company’s auditors, Deloitte, have completed a review.

Investigations so far have indicated that there has been a “breakdown in internal controls” in the Welcome Financial division, resulting in the incorrect application of impairment policies.

Welcome Financial has around 500,000 non-standard customers and provides direct repayment loans from 183 branches across the UK.

 

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