More than £24m was owed by a loan provider as it entered administration with the loss of almost 140 jobs.

The Manchester-headquartered Auden Group collapsed in March having been loss-making since it was set up in 2013. The business had provided short term (3-12 month) loans of between £200 and £1,000 to customers.

It was regulated by the Financial Conduct Authority (FDA) and had a £2.7m loan book supporting 4,200 customers. Prior to entering administration it had grown to employ 138 people.

Daniel Conway and Geoff Rowley of specialist business advisory firm FRP Advisory were appointed joint administrators of the group on the 23rd of March.

At the time, FRP said it had been hired after the business’ level of lending was not able to sustain its operational cost base. Auden Group is now not accepting applications for loans from new customers.

According to its most recently available set of accounts, the group posted revenue of £15,164 for the 12 months to September 30, 2021, and losses of £19.7m.

In a newly-filed document with Companies House, FRP said the company had been loss-making since its inception with the losses increasing every year. The business had been funded through shareholder capital and loans.

The administrators added that Auden Group’s losses were mainly due to the building of the technology platform to support the provision of loans as well as both payroll and overheads being “vastly in excess” of what could be covered by its revenue alongside “significant” marketing expenditure.

FRP said: “The business was built for scale to service the extensive market for vulnerable customers more ethically than other lenders, improving individuals’ credit scores in the process.

The scale required to turn the company’s operations into a profitable and cash generative business was never realised.”

Money lender Glas Trust Corporation was the largest of the group’s creditors, being owed £22.8m as the group entered administration.

HMRC was also owed £356,000 while the likes of KPMG, EY and BBC Global News are also creditors

FRP’s document also states that Auden Group was owed £370,765 from eight former staff members through its employee loan scheme.

The administrators added that discussions over repayment terms have started with a number of the former employees and £2,083 has so far been repaid.

FRP also said that three individuals were issued shares, worth a total of £746,636, in the group which remain unpaid for. Auden Group is also due £68,559 from Barclaycard.

After the company entered administration, it emerged that the Competition and Markets Authority (CMA) has written a letter to the group over “failing to send out summary of borrowing statements, or notifications that summary of borrowing statements were available” in 2021 and 2022. The CMA said that 166 customers were affected.

In the letter, the watchdog said: “The provision of summaries of borrowing is an important element of our remedy package following the Payday Lending Market Investigation.

This measure, in combination with other measures, was designed to encourage borrowers to actively shop around and provide them with comprehensive information about fees and charges.

Summaries of borrowing are provided at specific points in time in the lending cycle to give borrowers suitable information at key points to allow them to make timely and well-informed decisions.”

The letter went on to say: “Failure by lenders to comply with their legal obligation to provide summaries of borrowing at the specified times may affect decisions about borrowing and can lead to worse outcomes for borrowers.

The CMA is concerned that borrowers who did not receive summaries of borrowing at the times they should have, in line with the order, did not have all the information they needed to inform their decision-making. This is a particular concern, where people have taken out further payday loans without receiving the necessary information.

As you are aware, article 11.1 of the order prohibits lenders from entering into any payday loan agreement with borrowers in the UK unless a summary of borrowing is properly made available.”

It concluded: “This means that Auden is prohibited from supplying payday loans unless it consistently makes summaries of borrowing available and notifies customers of the availability of summaries of borrowing, in accordance with articles 12 and 13.

Given this, CMA colleagues have worked with Auden to understand the extent and causes of the recent breaches and the steps that you have taken to put them right.”