SANDTON: Harith Advisory Services, a division of General Partners Proprietary Limited, wishes to place on record the following information regarding its involvement with PetroSA
- On 25 April 2013, we received a letter from PetroSA, advising us that PetroSA would commence an investigation in respect of some of its contracts, following a decision by its board of directors, and in addition, advising us of the contents of, and their response to, recent press reports. We were advised that once due process of the investigation by PetroSA had been completed the appropriate corrective action would be taken, and an announcement made in that regard.
- On 28 April 2013, we received a letter dated 23 April 2013, in terms of which notice of termination of the Harith Advisory Services in respect of Project Irene, was given. The effective date of termination is 23 May 2013. We requested reasons for the termination of our services, in a letter dated 29 April 2013, and have to date not received written response from PetroSA in this regard.
- A full handover period of any material relating to the project will be handed over to PetroSA within the notice month period
- Harith is reviewing its options but would like to maintain that it has complied with all its performance obligations under its mandate. To our knowledge the appointment of Harith Advisory Services in respect of Project Irene received all requisite approvals, for a project of this nature, from PetroSA. Harith was invited to partake in this mandate and duly presented its credentials to a board committee of PetroSA. This board committee also had a shareholder representative. The board committee was specially constituted and delegated to consider the identification, acquisition and funding of the downstream asset. Following its consideration, PetroSA appointed Harith to perform this task
- The mandate was for Harith to assist PetroSA with its downstream identification, acquisition and funding
Harith negotiated a monthly retainer and capped a success fee. The project was undertaken on a risk sharing model – which also did not make provision for a cancellation fee should the contract be terminated. The Harith fee was both reasonable, with due consideration to the scope of the services. Harith’s involvement with the transaction, has recorded significant milestones relating to fulfillment of the mandate and PetroSA has expressed its appreciation of the hard work, diligence, commitment and contribution to this very complex and sensitive project. In the course of executing our mandate, Harith also presented numerous times, in excess of 8 times, to the joint board committee and the board of PetroSA.
The terms and conditions of our mandate were negotiated with PetroSA after the presentation of our credentials to the board committee.
- As managers of public funds, we take any such allegations with extreme seriousness
- Harith and its staff have a sterling track record of governance, including disclosure and public reporting
- Although we are bound by a confidentiality agreement with PetroSA, we flatly reject many unfounded assertions in the original reports, including:
- The insinuation that the Harith team lacks the appropriate experience. The Harith platform and the requisite staff comprise decades of transaction experience across numerous sectors and countries
- We also dismiss the simplified characterization of the advisory work at hand as this was a complex deal in size and scope even by international standards and also dismiss the insinuation that Harith, in any way, acted to circumvent PetroSA’s process’s and Board
- We also categorically state that Harith is no way involved in any part of the Ghana transaction
- We have also considered it prudent to terminate our relationship with one of our service providers, Nkosi Sabelo Incorporated until these matters have been resolved.
- We have communicated this decision to Nkosi Sabelo incorporated (INC) and the company is in full support of our decision. Nkosi Sabelo incorporated was engaged by advisory due to its previous experience in the sector. They assisted advisory with engagement issues pertaining to shareholders of the target company preparing them for our approach. And this was in the nature of the confidentiality of the matter. They also undertook several international trips on our behalf. We paid Nkosi Sabelo for the worth of their work. We are confident of the skills base they brought,their experience and the value add to our work.
- We have taken the decision to terminate our contract with Nkosi Sabelo Inc following the revelations that Nkosi Sabelo Inc was allegedly double invoicing. It is our understanding that Nkosi Sabelo Inc was contracted only to Harith and not to PetroSA, at the time of the contract.
- We were not privy to the HSBC mandate neither were we aware that Nkosi Sabelo Incorporated acted for PetroSA on the termination of the HSBC contract. We also did not have sight of any work done by HSBC on behalf of PetroSA in this mandate as PetroSA did not share this with us. Our engagement started on a clean footing and we are proud of our achievements and the milestones recorded in making this deal possible. The notion that this deal was a foregone conclusion is patently false. We can vouch for our work carried out in this deal. We assert that we are appropriately skilled and experienced to handle this project.
- Harith deals with public funds and to the extent that these revelations may damage our reputation and therefore our ability to continue to trade on the basis of trust and integrity, we thought it prudent to disassociate ourselves with the law firm until such time the investigations have been exhausted.
- We will co‐operate with any investigation in this matter fully. We are not prejudging Nkosi Sabelo Inc firm of lawyers.
- As an organisation, we would like to categorically and emphatically state that no one undeserving was paid by us or we were used as a conduit for any unethical behaviour contrary to our values.
We look forward to actively participating in any and all inquiries related to this investigation, in the hope that the facts will be publicly available soonest to clear any doubts as to Harith’s role.
Chief Executive Officer