Cattles suspends three directors

Tuesday, 10 March 2009 12:00

Doorstep lender Cattles has suspended three directors and warned it has breached its banking covenants amid an investigation into the firm's accounts.

Finance director James Corr, chief operating officer Ian Cummine, who is also chairman of Welcome Financial Services, and Adrian Cummings, compliance and risk director for Welcome's lending division, have been suspended pending the outcome of the review.

Cattles, which lends in the subprime sector, has been under review from auditors Deloitte for the last two weeks after admitting it may not have enough money to cover bad debts.

The board also issued its third profit warning in three weeks, announcing the group is expected to make a "significant" loss before tax for the year ended December 31st 2008 and will have to restate results for 2007.

Cattles said it is in breach of its borrowing arrangements, which means its lenders could call in their loans immediately, putting 4,000 jobs at risk.

The board said it will be seeking appropriate waivers from its lenders, which include Royal Bank of Scotland.

The suspensions follow three more from last week, including managing director of Welcome Financial John Blake, finance director Peter Miller and operations director Mick Belcher.

Shares in the firm were trading 14.29 per cent lower by 10:47 GMT at just 2.10p.

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