The mega merger
KPMG becomes stronger with the merging with Andersen
Job advertisements by Ernst & Young and Vietnam Auditing Company
(VACO) began to appear in late April nearly one month after two
international auditing companies in Vietnam, KPMG and Andersen,
held merging talks. Many people in the auditing circle guess that the
two companies intend to lure Andersen's tax, consulting and auditing
experts.
Enron's bankruptcy in the U.S. has taken its toll in Vietnam. KPMG has
urgently prepared to sign specific contracts and complete legal
procedures for Andersen acquisition. "Our merging with another
auditing company is inevitable," said Brook C. Taylor, general director
of Andersen Vietnam. Troubles around the Enron scandal have
prompted Andersen subsidiaries worldwide to merge with other
auditing companies. Recent reports show that Andersen is preparing
to merge with KPMG, Deloitte & Touche, and Ernst & Young. KPMG
has announced buyback of 23 Andersen subsidiaries for US$284
million. In Vietnam, KPMG has decided to buy Andersen to increase its
market share. Once an agreement is reached, the company will have
300 new clients from Andersen, in addition to the Vietnamese staff
trained by Andersen.
Warrick Cleine, KPMG deputy general director, declined to reveal the
price of buyback of Andersen Vietnam, explaining that such information
could not be announced before June. Meanwhile, an official from the
Ministry of Planning and Investment said the ministry had yet to receive
an announcement on the merging of the two companies. KPMG
Vietnam has an investment of US$5 million while Andersen Vietnam
has around US$1 million. Both are operating at a profit.
According to some sources, KPMG and Andersen merger may cause
concern for two foreign auditing companies in Vietnam,
PriceWaterhouseCoopers and Ernst & Young, as a competitor will
disappear but the remainder, KPMG, will become stronger. The
merging will strengthen its position in the telecom, energy, banking and
insurance sectors, and even Japanese investment. Some forecast that
KPMG will be more aggressive in consulting services. Once it
establishes a strong position in this sector, it will become a heavy rival
of PriceWaterhouse Coopers.
Many people thought that Andersen disappearance may cause
personnel disturbance in this company. However, what happened
recently has caught the interest of many circles. According to Andersen
Vietnam, only several out of its 100 employees have left, not to work for
other companies but for overseas studies. Taylor said there was no
reason for his staff to worry about dismissal in the near future when
merging occurs, because KPMG has to retain all of them to maintain
services for Andersen's 300 old clients. By mid-May, KPMG had not yet
announced any information regarding Andersen personnel. However,
an authority of the company said he hope there would be no
unfavorable decision.
By Thuc Doan - The Saigon Times Weekly - June 01, 2002.
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