Regulators face growing pressure to intervene in an increasingly vicious takeover battle for doorstep lender Provident Financial.
There are rising fears that vulnerable borrowers could be harmed as Non-Standard Finance steps up efforts to seize control of the Provvy, having launched a hostile £1.3billion takeover bid.
MPs and campaigners are now calling for action to ensure the deal does not hurt Provident Financial’s 2.4m customers or the 180,000 who have borrowed from NSF.
Mud-slinging: NSF’s John van Kuffeler, left, and Malcolm Le May of Provident Financial, right
It came as the Provvy launched another attack on NSF, branding its offer a ‘dreadful deal’.
In response, NSF blasted the Provvy’s management for failing customers, incompetence and a disregarding shareholders.
City analysts warned the spat is increasingly unedifying, particularly when the two are arguing over the right to lend to some of Britain’s most hard-up families.
David Buik, of trading firm Core Spreads, said: ‘Rhetoric like this is very counter-productive. In a high-risk business, shareholders want reassurance that the company will be run by responsible people who have the support and respect of the community.’
NSF boss John van Kuffeler ran the Provvy for 22 years and has pledged to boost profits if his bid to seize control succeeds.
The 70-year-old is going head to head with the Provvy’s chief executive, 61-year-old former investment banker Malcolm Le May.
NSF already has the backing of major Provvy shareholders Invesco Asset Management, Marathon Asset Management and fund manager Neil Woodford, who together have a stake of more than 50 per cent.
But in its latest broadside, the Provvy attacked NSF for accounting errors over a dividend payment that broke company law, saying it was a sign the firm could not be trusted. Provvy chairman Patrick Snowball said: ‘These unlawful distributions are a telling indictment of the competency of the NSF team.
‘At this point, there is no new revelation about this deal; it is still the same dreadful deal that it was on day one.
‘It is more of a coup d’etat than a hostile takeover, spearheaded by a management team at NSF with a track record of value-destructive acquisitions, and facilitated by powerful shareholders.’
NSF said: ‘The Provident board is determined to deflect from its history of self-inflicted wounds and incompetence – defective leadership, customer failings, destruction of shareholder value, erosion of shareholder trust and strategic vacuum.’
Campaigners are demanding the Financial Conduct Authority (FCA) acts to ensure customers are not harmed by NSF’s plans.
The FCA has already written to NSF to say that any attempts to exploit Provvy customers for bigger profits will not be tolerated.
Labour MP Stella Creasy wrote to City Minister John Glen yesterday, saying she has her eye on the deal and asking what sanctions there would be if Provident relaxed its own controls.