January 29, 2018 / 6:29 AM / 24 days ago

Provident Financial former executives sue lender over "unfair dismissal" - The Times

(Reuters) - Four former executives have raised employment tribunal claims for unfair dismissals against Provident Financial Plc, dealing a fresh blow to the subprime lender struggling to revive its door-to-door operations, The Times reported on Monday.

Andy Parkinson, who headed Provident's doorstep lending unit, has a hearing scheduled for mid-April, The Times reported, without citing sources. bit.ly/2rJTd4F

Three other executives who worked at Provident’s troubled home credit unit have also brought claims, with hearings set for the spring, the report added.

Provident has been trying to reorganize the door-to-door lending business that has traditionally relied on self-employed agents and collecting repayments through weekly visits. But it has been unable to recruit enough people for its plan to replace external agents with direct employees.

The company is also seeking an executive chairman after the sudden death in November of former investment banker Manjit Wolstenholme, who took the helm in 2017 and was charged with turning around the business.

Wolstenholme announced changes to the consumer credit division’s management structure in August, with Chris Gillespie, who had been managing director of Provident’s consumer credit division, rejoining to replace Andy Parkinson.

Subprime lenders have seen a rapid growth in Britain over the decade since the financial crisis, as banks cut back on risky lending and years of austerity have forced poorer people to borrow more.

But the high interest rates charged for loans have fueled a public and political backlash, leading to a regulatory crackdown.

Provident, which was founded in 1880 and provided loans through the Wall Street crash of 1929 and both world wars, has also contended a Financial Conduct Authority probe into its Vanquis Bank and Moneybarn units.

Provident Financial declined to comment. Andy Parkinson did not respond to a request for comment via LinkedIn.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Amrutha Gayathri

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