Provident says 90 payments by hostile bidder ‘were unlawful’

Provident Financial beefed up its attack on hostile bidder NSF on Wednesday by highlighting 90 different shareholder payouts it says broke the law.

The doorstep lender, which is facing down the £1.3 billion offer, said £16 million of dividends and buybacks paid by NSF came from money recycled from its original flotation three years ago.

It said there were 5 'unlawful' dividends paid between October 2016 and October 2018 and 85 'unlawful and consequently void' share buy-backs between November 2017 and March 2019.

Provvy said NSF had never made a post-tax profit.

“These dividends and buybacks have effectively been returning to shareholders funds which were raised from shareholders in the first place, like taking someone’s wallet, removing a £20 note and then giving the £20 note back to them,” a Provident spokesman said.

NSF has more than 50% of shares in support for the deal, which has a deadline of 14 May.

NSF chief executive John van Kuffeler said: “Ultimately shareholders have a choice between the status quo and our plan for a brighter future for Provident. We have the management expertise and a clear plan to revitalise the business for the benefit of customers and employees as well as unlocking substantial value for all shareholders.”

Provident said it was “telling” NSF’s directors had failed to recommend a shareholder vote on plans to remedy the payment infringement, which NSF admitted to last month..

Provident claimed it was to let directors dodge liability over the payouts.

NSF said last month: “The infringements have no impact on NSF’s financial position or prospects or shareholder value.”