Provident in £38m sackings battle

YES Car loan company founders Len Newby and Joe Prince will start legal action this week that could leave credit group Provident Financial with a £38m bill.

Newby and Prince are suing Provident, the country's biggest lender to customers rejected by mainstream financiers, for unfair dismissal.

The pair, who started Yes Car with major backing from venture capital group Candover, shared £11 million with seven other Yes executives when they sold the cutprice car finance firm to Provident for £141m in 2002.

As part of the deal, executives, including Newby and Prince, who continued working for the company were entitled to a further payment of up to £50m if Yes Car hit performance targets over the next two years.

But Newby and Prince claim they were sacked days before the target date, which would have triggered payments, and are suing Provident for unfair dismissal.

Provident - also subject of a complaint by the National Consumer Council which sparked an investigation by the Office of Fair Trading - faces paying the full bill if the executives win.

Provident would be liable for a further £19m to each executive, in addition to any compensation awarded by the tribunal.

Yes Car has grown rapidly since being bought by Provident and in July announced a near-10% rise in first-half profits to £5m.

Weeks earlier, Provident, under chief executive Robin Ashton, suspended Newby and Prince alleging misconduct, claiming the pair had deliberately slowed the rate of car repossessions to make figures look more attractive. A disciplinary-hearing was set for June 25, which the pair claim was deliberately timed before the crucial June 30 cut-off date, but neither attended.

Newby was suffering from cancer and the pair claimed they did not have enough time to prepare. They were dismissed in their absence for gross misconduct.

Provident Financial said: ' Newby and Prince were dismissed by Yes Car Credit in June and we will be giving evidence in support of this action to the tribunal.'