NORTHAM Platinum has come in for criticism after paying an advisor R250m described by critics as excessive – a claim Northam rebutted.
“I have never seen such an extreme fee being paid in South African for advisory work,” Abie Cilliers, activist investment manager at Cilandia Capital told BusinessLive which wrote on the matter.
The fee was paid to One Capital Advisory which Northam Platinum said was to implement its new black economic empowerment (BEE) scheme, and was warranted.
“The fees payable to Northam’s transaction advisers are commensurate with a transaction of this size, complexity and innovation, considering the number of parties involved, the timeline from the inception to the implementation of the transaction and the size of the deal teams involved,” said Northam spokesperson Marion Brower.
The total fee expenses for the BEE transaction were R330m, with the lion’s share going to One Capital. Northam’s legal firm, Cliffe Dekker Hofmeyr, was paid R45m, said BusinessLive. The remaining R35m was paid to accounting advisers and other parties for administrative work, it said.
It cited the Finance Ghost, an online persona who provides commentary about corporations here and abroad who said: “A R250m corporate finance fee is beyond shocking. Truly. I have never seen anything like it, let alone [one] payable to a boutique firm like One Capital”.
