Business
NSF's unlawful distributions and share buy-backs
NSF's unlawful distributions and share buy-backs.
About this update from Vanquis Banking Group Plc
[{"type":"text","content":"\n \nRNS Number : 6498X Provident Financial PLC 01 May 2019 \n\nNOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION\n \nFOR IMMEDIATE RELEASE\n \n1 May 2019\n \nProvident Financial plc (\"Provident\")\nNon-Standard Finance plc (\"NSF\") seeks to rectify its unlawful shareholder distributions and share buy-backs\nThe Provident Board notes that NSF has published notice of its 2019 annual general meeting (the \"NSF AGM Notice\") admitting:\n· the payment of 5 unlawful interim and final dividends between October 2016 and October 2018 aggregating approximately £12.5 million (the \"Dividends\"); and\n· 85 unlawful and consequently void share buy-backs of a total of 5,070,234 shares aggregating £3,468,890 between 9 November 2017 and 29 March 2019 (the \"Share Buy-backs\"). \nThe fact remains that since the NSF IPO, NSF has not generated post tax profits. The Dividends and Share Buy-backs have therefore effectively been returning to shareholders monies raised from them. This can be evidenced by the fact that the unlawful Dividends increased the NSF group's retained losses in each year they were paid. There is no explanation provided in the explanatory notes to the NSF AGM Notice as to how profits have been created to make good the deficits in profits available for distribution.\nThe NSF AGM Notice acknowledges that NSF may have claims against past and present shareholders who received any of the unlawful Dividends and against directors at the time the Dividends were paid and at the time the Share Buy-backs were entered into.\nThe resolutions proposed by NSF are intended to put all potentially affected parties in the position in which they always intended to be had the Dividends and Share Buy-backs been made in accordance with the Companies Act 2006 by releasing such claims and cancelling and extinguishing the shares that were purportedly purchased by NSF through the Share Buy-backs.\nIt is telling that the NSF Board cannot recommend that NSF Shareholders vote in favour of certain shareholder resolutions, given the interest of each of the NSF directors in being released from potential liability.\nIt is also not...