GRAHAM Wellesley, chief executive of alternative lender Wellesley & Co, has spoken out after recent criticism of the company’s loan performance.
Earlier this year, a series of media reports highlighted a report from auditor BDO which stated that Wellesley & Co was “dependent on raising further capital to continue to operate for 12 months”. This statement referred to the firm’s performance as at December 2015.
However, Graham Wellesley told Peer2Peer Finance News that these reports were misleading as they referred to the firm’s mini-bonds only, and not its peer-to-peer lending platform.
“I think the criticism was very unfair,” said Wellesley. “The negative publicity started in relation to our mini-bonds.
“We are not a bank. So a PRA-regulated bank issuing bonds has regulatory capital ratios. But why would you compare a mini-bond in a non-bank to a bond at a regulated bank? I don’t think it’s a fair comparison.
“We have raised the largest mini-bonds in the UK in excess of £50m. That money can be used as operating capital of the business and that’s all fully disclosed before anyone invests. We still operate with a positive NAV.”
Read more: Are P2P capital calls a bad sign?
Other reports criticised a personal investment of £2.4m which was made by Graham Wellesley to help “absorb impairment losses that would otherwise have been passed on to P2P investors.”
Wellesley defended this move, saying that these losses have now been accounted for, and its loan default rate is less than one per cent.
Look out for P2PFN’s full interview with Wellesley at www.p2pfinancenews.co.uk in the coming weeks.