Picking over the carcass of Lex Greensill’s corporate empire has turned into lucrative business for accounting firm Grant Thornton’s British arm, whose partners are generating the kind of fees most administrators can only dream of.
That’s easy enough to do when you’re charging out at an average $1400 an hour, and Grant Thornton’s work on Greensill in its fourth year with no end in sight.
Consider the outrage generated when fees for the Ansett collapse were reported to have tipped over $40m – across PwC, Arthur Anderson and KordaMentha – in the first five years of administration.
Well, Grant Thornton have billed more than £40.7m ($77.5m) in fees for their work administering Greensill Capital UK since the heart of Lex’s financial engineering network went under in March 2021.
Another $44.4m has gone out the door in expenses, mostly in legal fees. And that’s just for one company – Grant Thornton has also billed about $1.9m for administering Greensill Capital Management Company.
To be fair, the job is probably one of the most complicated around.
Greensill’s business model was to sit between a business and its suppliers. Suppliers got paid early and buyers of their goods got to extend their credit terms. Greensill then bundled up its lending packages and flogged them off through Credit Suisse.
All up, about $US17.7bn had been lent out by Greensill’s financing group by the time it went under. Grant Thornton has managed to unwind about $US9.3bn of that, with the effort pretty much stalled since it last reported a year ago.
But the billings haven’t stopped.
Administrators Chris Laverty, Will Stagg and their staff are charging £722 an hour to investigate the company’s affairs (1562 hours for the year), £707 an hour to run what remains of the company (1899 hours) and £873 an hour to try bring in more cash from Greensill’s debtors (366 hours, and presumably most of that has been haggling with Sanjeev Gupta over why he still hasn’t coughed by the $US590m he still owes).
Explaining to Greensill creditors they still can’t be paid what they’re owed costs £772 an hour (225 hours) and administration costs are billed at £643 an hour (901 hours, though the report didn’t note whether those costs included the time spent giggling over how much they’re being paid).
All said, that’s 4952 hours for the year at an average £715 an hour.
And the creditors still owed money?
For those hoping to be paid out by the fourth anniversary of the Greensill collapse, in March 2025, well, keep hoping.
Grant Thornton says it will need another extension of time, and will make an application to the British courts “in due course accordingly”.
Missing in action
Remember that $1m payment made by the Australian Catholic University to its Dean of Law, Professor Kate Galloway?
For those who’ve forgotten, this was the money handed to Galloway to terminate her contract.
Not for anything that she’d done anything wrong. Quite the opposite.
Galloway had been appointed in January to the prestigious role but found herself undermined by ACU’s conservative administrators when they learned of her left-wing sensibilities and positioning on abortion.
Never mind that her views on abortion were amply documented online and freely available to read by anyone sitting on the selection panel. It’s just that no one bothered to Google her.
ACU’s solution to this mess? Vice-chancellor Zlatko Skrbis organised for Galloway to vacate her post and accept a new title in exchange for a hefty sum in damages, an arrangement whose details were supposed to be buried under a pile of non-disclosure agreements without a hope of ever seeing daylight.
Well, they certainly have seen daylight, with Margin Call publishing almost every gross aspect of this shambolic affair.
But the consequences have been minimal for Skrbis and for ACU’s Chancellor Martin Daubney, neither of them fielding so much as a phone call from the office of Education Minister Jason Clare.
We know because the invertebrate Clare was finally forced to respond to questions from Senator Ross Cadell, who asked in parliament whether the minister had bothered to make a call to anyone at ACU over this outrageous trampling of academic freedoms, or whether the minister even had a view over the misuse of public funds.
Clare’s answers were characteristically useless. They were pried loose a week ago and delivered by Agriculture Minister Murray Watt, who represents him in the Senate.
Clare confirmed he’d had no communication at all with ACU about the secret payment and, surprisingly, that he’s without any personal view on the misuse of funds. This, he said, is because the government “does not intervene in universities’ day to day operations, including staff payments”.
Exactly the kind of accountability-dodging you’d expect from a minister who doesn’t speak unless there’s a vote to be won. It’s why Clare can’t speak about universities but doesn’t mind chiming in on the application of international law in Gaza, as he did on the ABC a week ago, despite being wholly illiterate on the subject.
It’s a topic very dear to his voters in the western Sydney seat of Blaxland.
Travel rorts
It’s seldom admitted but commonplace for Canberra’s political staffers to abuse their travel entitlements.
Not as well known is that there’s an arm of government actively policing this exploitation – and recouping humble amounts of dough in the process.
Dubbed the Independent Parliamentary Expenses Authority, its people have been haranguing everyone from Jacqui Lambie to Jim Chalmers over their Cabcharge and Comcar expenses.
The good news is that most MPs have behaved themselves. The only exception has been Nationals leader David Littleproud, who voluntarily repaid $2009 over a trip to the Gold Coast (where he and his wife had been written up for purchasing a beachfront apartment).
Staffers, on the other hand, have been caught mooching much harder off the taxpayer purse. A former staffer to Fowler MP Dai Lei was ordered to pay back $7360 over spending on hire cars and business class travel found to have been “not consistent with the provisions of the legislative framework”.
One of Matt Thistlethwaite’s staff was invoiced $1292 for suspect Uber trips to and from Parliament House, as were two members of Tracey Roberts’ staff, both of whom were asked to repay $1434 for their ride-share receipts. Roberts tried to defend them by saying both lived too far from public transport, but it didn’t wash with the IPEA.
A more recent case published last month took issue with a staffer in Lambie’s office who’d spent $27,696. Lambie said the employee worked from home and travelled three hours at a time to help out in the Burnie electorate office during workforce shortages.
And in those instances, Lambie said, she asked that her staffer stay in accommodation overnight “to prevent the risks of fatigue-related driving dangers”.
The IPEA grudgingly accepted that explanation.
South32’s succession confusion continues
A year ago South32 was interviewing candidates to take on the chief executive’s role, but there’s still no sign of Graham Kerr leaving the miner’s C-Suite.
Court sends Clive back to his swamp
Clive Palmer’s interminable efforts to get clear of prosecution over alleged breaches of the takeovers code were unceremoniously swatted aside by the Federal Court.