Search the Internet          Tips  Sites: Finance, Investment

Andersen Malaysia seen ruling out merger for now

The Malaysian unit of US accounting giant Arthur Andersen is considering mergers with its rivals but sources said on Thursday its local owners might just decide to abandon the franchise and strike out on their own.

Indicted by the US government for its role as auditor to failed energy trader Enron, Andersen has become the target of billion dollar lawsuits as clients left in droves.

A proposed global merger with KPMG, which originally had the support of 13 Asian units, was called off on Tuesday after a wave of defections by Andersen units to rival firms.

Andersen Malaysia is wholly owned by Malaysians, who are also partners at Hanafiah Raslan & Mohamad (HRM) -- the largest local accounting firm.

"Andersen Malaysia is talking to all firms but one option is to go back to HRM," one source told Reuters. "But there's nothing definite yet."

With a workforce of 1,300, Andersen audits an estimated 153 of the more than 800 companies listed on the Kuala Lumpur Stock Exchange, another source said.

Industry estimates give PricewaterhouseCoopers the largest share of clients among the top 100 companies on the KLSE, followed by Ernst and Young, KMPG, Andersen and Deloitte.

"Unlike Andersen Singapore, Andersen Malaysia has a local firm," the first source said. "HRM is a strong local brand. There's no pressure for it to merge although without an international link it may lose some global clients."

Andersen Singapore this week opted to merge with Ernst & Young, as did units in New Zealand and Australia.

Andersen Thailand agreed to form a business alliance with rival KPMG, while in Hong Kong and China, Andersen units chose to tie-up with PricewaterhouseCoopers.

Zainal Abidin Putih, chairman of both Andersen Malaysia and HRM, said recently the local unit was strong financially.

"The Malaysian firm is financially strong and is capable of operating independently," he said in a statement.

He told one Malaysian television network recently the company was in no hurry to seek merger partners.

"At the same time our firm also has the name Hanafiah Raslan Mohamad and you know we are also working under that name, so we are in no rush to take a deal with anyone here," he said.

ALSO READ:
The Enron Saga
The Rediff Budget Special
Money

Tell us what you think of this report