The City watchdog has launched an investigation into the sub-prime lender Amigo, months after its estranged billionaire founder accused the group of irresponsible lending. The Financial Conduct Authority is looking into whether Amigo properly conducted creditworthiness assessments before lending money to customers, the firm said. The investigation, which began on Friday and covers the period from November 2018 to date, is also focused on the “governance and oversight” of those credit assessments. Amigo is the UK’s largest provider of guarantor loans, which use friends and family to guarantee repayments on loans to people who might otherwise struggle to borrow. The FCA’s investigation comes months after Amigo’s billionaire founder James Benamor launched a scathing attack on the group, following his resignation as chairman. He claimed Amigo had been lending to customers in ways that its own internal complaints team would have deemed “irresponsible”. Benamor has since used his 61% stake in Amigo held by his firm Richmond Group to call for an extraordinary general meeting on 17 June in an attempt to vote out the entire board and install two of Benamor’s preferred candidates as chairman and chief executive. Amigo has vehemently denied Benamor’s accusations, and on Monday filed an injunction at the high court trying to block Richmond Group from voting for the board’s immediate departure. The lender’s chairman, Stephan Wilcke, said: “The board has offered to leave, and will do so, but it must be through an orderly process. We cannot risk the Amigo group’s ability either to conduct its FCA regulated activities or to continue as a London-listed company operating in accordance with the UK corporate governance code.” Shares in Amigo, which was once valued at more than £1bn and whose shares were trading at 275p in June 2018, fell 1.3% by midday on Monday to 18.5p. John Cronin, a financial analyst at the stockbroker Goodbody, said: “Benamor has been extremely vocal about the lending standards applied at Amigo since his initial departure … His concerns expressed, and actions taken have likely caught the attention of the regulator, and it remains to be seen whether the lending standards used in the period in question will stand up to scrutiny from the FCA.” Amigo confirmed on Monday that it would continue discussions with potential buyers. The lender put itself up for sale in January, and said it was facing increased pressure amid a regulatory crackdown on the sector and a rise in customer complaints.