Lyca founder steps down as director amid financial turmoil

Allirajah Subaskaran, founder and majority owner of Lyca Group, has stepped down as a director following months of escalating financial, legal and governance challenges that culminated in board-level changes.

He remains group chairman and majority owner,

Subaskaran’s decision to step down from his directorship appears to be part of this restructuring process, aimed at restoring governance credibility and satisfying external stakeholders, including regulators and tax authorities.

His ongoing involvement is expected to be more strategic than operational as the company attempts to stabilise its finances and rebuild trust with partners and regulators under the control of his long-time business partner Premananthan Sivesasamy who  already oversees strategic, commercial, and financial matters across the 23 countries in which Lyca Mobile operates.

Subaraskaran’ resignation, formally recorded at Companies House on 13 June, comes after a turbulent year for the UK-based MVNO, which operates in more than 20 countries and has long marketed itself as a low-cost international mobile provider.  He remains chairman.

Lycamobile’s problems intensified in June 2024 when its auditor, PKF Littlejohn, refused to sign off the company’s 2022 accounts. The auditor cited a lack of “sufficient appropriate audit evidence” related to related-party loans and the recoverability of significant intercompany balances.

This refusal followed a pattern of missed deadlines, late filings, and growing concerns over the company’s corporation tax liabilities, large VAT arrears, and opaque internal loan arrangements.

Tax and VAT Battles

The group also became embroiled in a series of disputes with HMRC, including a £51 million VAT ruling and an estimated total liability potentially approaching £100 million. These issues prompted winding-up petitions filed by HMRC in August 2024.

Meanwhile, in France, Lycamobile’s local operation was earlier found guilty of VAT fraud and money laundering, resulting in a €10 million fine and criminal convictions of senior executives, including the former French CEO. In January Lyca announced it was slashing London head count to 48 as it reorganises to concentrate on Africa markets

Mobile News has requested a statemet from the company.