John Fenty stepped down as deputy leader of the North East Lincolnshire council and relinquished his role as cabinet member for regeneration, skills and housing to “avoid an unwarranted distraction”, according to a report from the BBC.
Conservative councillor Fenty set up a property development company in April with Alex May. May was formally known as Alick Kapikanya, and was convicted for his part in a £3.5m mortgage fraud in 2014.
May was given a six-year jail sentence at Manchester Crown Court after he was found guilty of sharing loans with another property developer Marshall Joseph which had been fraudulently obtained on houses they did not own.
The gang, which included five others, targeted elderly homeowners across the north of England including Lincolnshire from 2007.
May was seen attending a fixture at Blundell Park, Grimbsy Town’s football ground, on Saturday sitting in the director’s box.
After May’s appearance at the stadium was reported by the Grimbsy Telegraph, it later emerged that May and Fenty had set up a property development company called Town Centre Living in April this year.
In a statement reported by the BBC, Fenty said: “After reflecting on recent media reports and the impact on both my party and the council itself, I have taken the decision in the best interests of all concerned and to avoid an unwarranted distraction to the enormous progress being made in the borough.
“My decision will allow me to focus more on my other business activities and the football club I’m passionate about.”
Grimsby Town said May wanted to buy £1m of shares but his approach was rejected.
Fenty will continue to serve as councillor for the Humberston and New Waltham ward.
