European members step back from Andersen

Leading European members of Andersen, the embattled auditor of Enron, tried to distance themselves yesterday from the criminal…

Leading European members of Andersen, the embattled auditor of Enron, tried to distance themselves yesterday from the criminal indictment facing the firm in the US.

A number of big Andersen practices in Europe are understood to be in talks with rivals in case a global merger of the firm fails.

Andersen held unsuccessful talks last week aimed at global mergers with its "Big Five" rivals Ernst & Young and Deloitte Touche Tohmatsu.

Meanwhile, Andersen continues talks with KPMG, its "Big Five" rival, over a possible global deal to save the firm, which is suffering from client defections and massive shareholder litigation.

READ MORE

"Everyone at Andersen is trying to preserve as much of the network as possible," said a senior partner.

"But we don't want to be left high and dry if things go wrong."

Mr Christoph Gross, head of Andersen in Germany, Austria and Switzerland, said partners' meeting of Andersen Germany had given him the mandate to cancel contracts with the international Andersen partnership.

Rival Big Five firms said they had been in contact with Andersen's UK arm over a possible deal.

Andersen Italia said it was not affected by Andersen's US problems and was considering its international links.

The unilateral withdrawal of national arms of Andersen from Andersen Worldwide, the firm's umbrella governance body, could lead to legal disputes.

Andersen unsuccessfully demanded $14.5 billion in compensation in 2000 when Andersen Consulting, its former sister firm, left the Andersen Worldwide network.

The US indictment accuses Andersen of obstructing justice by shredding documents relating to its audit of Enron, the energy trader that collapsed in December.

Mr Aldo Cardoso, head of Andersen France, said: "One solution could be an alliance of non-US branches.

"Three big networks have said they were interested."