Grant Thornton to charge over £ 20million for Greensill administration


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Grant Thornton has told Greensill Capital’s creditors he plans to invoice nearly £ 21million in his first year as administrator of the collapsed lender’s UK operations.

The fee forecast, filed in a report to Companies House this week, has risen by almost a third from a previous estimate and now accounts for almost 5% of the accountant’s total annual income in the UK .

Grant Thornton, who was appointed in March after Greensill’s disappearance sparked a British political scandal, said he also expected to rack up nearly £ 7million in other expenses, including £ 6million in legal fees.

The honoraria underscore the complexity of the business outcome of the company founded by Australian financier Lex Greensill and advised by former Prime Minister David Cameron.

The estimate includes £ 12.1million in charges for over 22,000 hours of work in the first six months of Greensill Capital UK’s administration, an average of £ 545 per hour.

The Allen & Overy law firm, which worked on Greensill’s ‘pre-IPO’ funding cycle months before the finance company collapsed, was paid £ 856,000 for the work before Greensill did officially enters administration and has since incurred an additional £ 3.9million, according to the report.

Lawyers for Herbert Smith Freehills, Kingsley Napley, Simmons & Simmons and DLA Piper were also called in to advise.

The report did not estimate Grant Thornton’s fees and expenses beyond March 2022, but administrators expect their work to continue for at least a year after that as they attempt to recoup the monies. owed to creditors such as Credit Suisse, which included Greensill’s loans in the funds to which he sold. investors.

“How does Grant Thornton justify charging so much?” Said a person close to Credit Suisse. “Credit Suisse is not represented on the creditors’ committee, although its investors fund a large part of the costs.”

Directors are normally paid out of the funds of the affected company. But to keep Greensill running in administration, Credit Suisse paid special fees and other investors in the supply chain finance company’s investment products pay fees directly to Grant Thornton.

Lex Greensill at the Treasury Committee © Parliamentlive.tv

Grant Thornton’s appointment as a director raised eyebrows in the financial industry, as the company was an adviser to GFG Alliance, the family business empire of industrialist Sanjeev Gupta, whose default on $ 5 billion in debt has accelerated Greensill’s demise.

GFG Alliance paid Grant Thornton nearly £ 6million in fees from 2016 to 2020. Neil Barrell, the accounting firm’s senior partner, joined GFG in 2019. He became COO the following year but died shortly after.

The director’s report reveals that GFG owes Greensill Capital $ 590 million. Although part of this was unpaid advisory fees, Greensill Capital also held debts from GFG on its own balance sheet, although the entity was expected to act primarily as an intermediary between borrowers and lenders. .

The report also provides an overview of some of the debts pursued by the directors, including advances of $ 494,000 to three Greensill employees and a loan of $ 1.1 million to an overdue employee.

Credit Suisse executives have been frustrated with Grant Thornton’s progress in collecting debts and processing insurance claims, according to people familiar with the discussions.

They also wonder if Grant Thornton is in conflict due to his historical ties to GFG and Greensill.

Swiss asset manager GAM previously paid the accounting firm to investigate its relationship with Greensill, who himself hired the accounting firm in 2020 for restructuring advice.

Grant Thornton declined to comment. The cabinet has previously said that before accepting the appointment as a director of Greensill, it made sure there was “no threat to its independence due to past relationships.”

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