London - Controversial payday loan company Wonga has been left rudderless after founder and chairman Errol Damelin followed the firm’s chief executive out of the door.
Their departures have left Tim Weller serving both as chief financial officer and interim chief executive.
Damelin, who co-founded the payday lender in 2006, left as Wonga is facing the most difficult period in a short history.
His departure comes just days after a competition inquiry into payday lenders found that British consumers might collectively be overpaying by as much as £45m (about R815 000 million) on their loans because of a lack of competition.
The decision is expected to spark a clampdown that could see a cap imposed on the amount of interest that payday lenders, sometimes called legal loan sharks, can charge.
Wonga has also been criticised by Justin Welby, the Archbishop of Canterbury, who described payday lending as “usury”,
Wonga has already been rocked by the departure of former chief executive Niall Wass, who left in May after six months in the job.
The lender said Damelin had decided to step down in November to “start working on new business ventures”.
The firm said he had stayed on only to help reorganise the board and is satisfied that the company now has a senior team capable of running the business.
Board member Laurel Bowden of venture capital firm Greylock Partners said: “He leaves a business with a strong platform which will power future growth”.
Wonga has attracted controversy over sky-high interest rates on short-term loans, which can demand as much as 5,853pc APR interest
But research has shown that an unauthorised overdraft from a bank can be just as expensive.
Damelin is thought to have a stake of around 5pc in Wonga, worth an estimated £50m.
He has defended the firm against claims of profiting from the money worries of Britain’s poorest. In interviews he has compared it to technological innovators such as Amazon.