US shareholder demands new CEO at Big Un-lender Finstro
Small business financier Finstro’s future is in doubt after its major backer, a US regional bank, pushed to oust its chief executive, Brad Prout, and demanded cost savings.
NBH Corporation, a regional bank headquartered in Colorado, invested $20 million in the Australian lender in 2021. But several sources said NBH has grown dissatisfied with its performance and sought the removal of Mr Prout.
Mr Prout, Finstro, and its parent FC Capital, are being sued by the liquidators of Big Review TV, the operating business of Big Un, in the Federal Court. Separately, FC Capital is trying to raise $500 million for a new private debt fund, while FC Capital affiliate Oceana, which has raised $600 million from high net worth Australians, institutions, and family offices, has been approaching global investors for further financing.
Big Un collapsed in 2018 after it was revealed that it presented FC Capital loans as revenue, boosting its sharemarket value. The liquidators allege Mr Prout and Finstro were aware of this.
Mr Prout appeared on Monday in a public examination as part of liquidation proceedings separate to the Federal Court action. He confirmed he had left his role as CEO of Finstro but remained a non-executive director of FC Capital and Finstro.
“My more recent change of status is because of an agreement with major shareholders that it be transitioned to a new leadership,” Mr Prout said.
Finstro chairman John Thomas is the acting CEO.
US-listed NBH has a market capitalisation of $US1.3 billion ($1.9 billion) and has not provided any public updates about the state of its investment in Finstro since its initial disclosure in 2021.
Sources said NBH’s cost cuts resulted in job losses at Finstro’s Sydney and Manila operations. NBH
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