Consumer loan group Cattles is in all sorts of trouble after admitting today that it broke it’s banking covenants, prompting another profit warning, and has suspended another three key directors from it’s business after uncovering a breakdown in it’s internal controls.
Three key members of the board have been suspended following the allegations, this follows last weeks news that another three members were suspended pending a ‘forensic review’ of the business.
Shares fell by 20% as Cattles when the company projected a significant loss for the most recent financial period and acknowledged that it would have to restate its financial statement for the year ending December 2007 when it recorded a 25% rise in pre tax profits.
Cattles had applied to the FSA in August for a banking licence to reduce the company UK Business dependency on the wholesale funding markets, but stricter requirements regarding liquidity have lead the company to withdraw the application. The company which thrived in it’s early years when high street banks withdrew from unsecured lending is now struggling as many of it’s borrowers are unable to repay their loans.
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