Lendy’s Head of Development gives evidence to the High Court

Alan Darling joined the peer to peer lending firm Lendy in May 2016 as their Head of Development. His role was to grow and head up the development loan side of the business as prior to then Lendy had only facilitated so-called bridging loans.

Lendy was placed into administration in May 2019 following action taken by the FCA.  Damian Webb, one of the Joint Administrators, was rather critical of how the business had been run:

“It will be apparent … that Lendy was subject to serious mismanagement for a long period of time. The operations of Lendy were chaotic at the best of times, and investors’ funds were not properly protected or managed. Indeed, it is surprising that Lendy managed to survive for as long as it did.“

Post administration, and as of at least July 2020, it is understood Mr Darling remained employed by Lendy and headed up the remaining Lendy team which consisted of Alan, Zaydur Rahman (Business Support) and Shane Lewin (Head of Customer Service and Head of Compliance (Acting)). 

Mr Darling appeared in court earlier today as one of two witnesses for Lendy in a multi-million-pound claim against a borrower who it’s said owes some £3.7m.

Confirming that the contents of his witness statement dated May 2021 was true and accurate to the best of his belief Mr Darling answered questions put to him by the borrower, who had appeared unrepresented.

Mr Darling explained that Lendy had used a company called NCI to conduct identity checks on the borrowers, who would confirm sight of a passport or driving license.  He explained that additional identity checks would be carried out by solicitors when the loan agreements were signed.

He was asked if he was aware properties were overvalued – “No, I’m not aware of that.” He replied, adding “at the time we would not lend money if we didn’t believe the valuation was correct.”

Mr Darling told the court “I’m not aware of giving anyone false hope” when asked if borrowers were misled with prospects over ease of repayment.

The court was told that Lendy was a P2P platform and that there was “probably three to four thousand individuals or companies who have invested money” in this loan and “obviously we’re trying to get that money back to repay those investors.”

A quirk of this loan, that appears not to have been identified in these proceedings, is that Lendy stepped in to repay lenders their capital from the so-called provision fund.  It’s unclear what, if any, repayment would flow to the original lenders.

The hearing continues.