Crowdstacker Appoints New Credit Committee Chairman Following Revelation of Bad Loan

Peer to peer lender Crowdstacker has appointed former RBS Senior Corporate Director, Ken Hillen, as Chairman of its Credit Committee. The move comes following a report that Crowdstacker had facilitated a loan to Burning Night Group in the amount of £7.5 million. Burning Night went into administration in late 2018. Crowdstacker has originated approximately £56 million in SME lending to date, thus the Burning Night loan was a material portion of its lending.

A report from last month indicated Burning Night sold assets following the bankruptcy without Crowdstackers agreement putting any recovery of investors money at risk. Crowdstacker allegedly held first charge over the loan. The announcement of Hillen’s appointment did not mention the Burning Night loan.

A Crowdstacker spokesperson recently told P2PFinanceNews they continue to work on recovery:

“In the case of Burning Night, recovery of money is an on-going process, and is likely to take more time to fully complete,” said a Crowdstacker spokesperson. “As such, it is too early to make a definitive judgment or assessment of how the security has protected investors in this instance. We appreciate waiting for a final outcome is particularly difficult for investors, but we would urge patience to allow the legal process to play out.”

Hillen has been hired to “focus on re-aligning all the lending and monitoring processes to prepare Crowdstacker as it makes changes to its business throughout 2019.”

Hillen has decades of experience in financial services working for big finance like RBS, Anglo Irish Bank and the Bank of Ireleand.

“Ken is the first of several key new team members that Crowdstacker will be putting in place over the coming months,” said Karteek Patel, CEO of Crowdstacker.  “He has a vast wealth of experience working in financial services both with large corporates and boutique businesses, which makes him an ideal choice for us.  This ability to understand the way larger banks operate amalgamated with a knowledge of the innovations taking place in alternative investment will help us to continue to challenge what doesn’t work in traditional finance without losing sight of the things that do.”

Hillen said he found Crowdstacker’s vision of investing and borrowing compelling:

“I’m very much looking forward to participating and contributing to bringing this vision to life.”

Crowdstacker is a member of the UK Peer to Peer Finance Association (UK P2PFA), an association that sets a high bar on transparency and best practices for online lenders. Crowdfund Insider asked Robert Pettigrew, Director of the P2PFA, for feedback on Crowdstacker’s problematic loan. Pettigrew said that all members of the P2PFA commit to observe the standards embodied in their Operating Principles and rules, which can be accessed from their website.  These principles exceed the regulatory requirements set out in the statutory regime supervised by the Financial Conduct Authority (FCA).

“P2PFA members commit to provide, in a clear and balanced way, the information necessary to enable customers and prospective customers (lenders and borrowers) to make informed decisions about their investments. This includes statistical data on bad debt and returns performance, which, in respect of Crowdstacker, can be accessed at:” explained Pettigrew. “All Crowdstacker’s loans – including their IF ISA investments – enable individual investors to decide in which of the UK businesses loans offered on the platform they wish to invest, as well as how much they wish to lend. Each loan on the Crowdstacker platform is accompanied by a published investment brochure accessible on their website. As a fully-regulated firm, Crowdstacker is required to comply with the FCA’s rules and processes regarding financial promotions. The particular queries about specific investments are best addressed by the platform.”

Sponsored Links by DQ Promote



Send this to a friend