The Financial Services Authority (FSA)
has reportedly opened a file on Cattles, the sub-prime lender,
after a £700 million ‘black hole’ in its loan provisioning was
uncovered earlier this month.
The shortfall in funding is the latest bad news
from the subprime lender, parent company of Welcome Financial
Services, which offers hire purchase among other financial
products.
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Cattles is preparing to restate its annual results
for 2007, while the new sum required takes the total needed to
cover loan impairments over the last two years to £1.1 billion.
Six members of the management team at Welcome have
been suspended, and Cattles has appointed its auditors Deloitte and
law firm Freshfields Bruckhaus Deringer to investigate the Welcome
accounts.
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By GlobalData
