Talks on to sell disreputed Arthur Anderson

New York- US (PANA) -- Arthur Anderson, one of the top five auditing firms in the world whose reputation has been smeared for approving fraudulent clients' financial statements, is in talks to sell itself to another auditing Company, Deloitte Touche Tohmatsu, the New York Times has reported.
US-based Anderson has operations in 84 countries, including Nigeria, South Africa and others in Africa.
According to the report, negotiations between the two firms began last week and a deal could be announced as early as this week.
Arthur Anderson was the auditor for collapsed Enron, a leading US energy Company, which is being investigated for fraudulent practices involving the hiding of its debts and overstating of its earnings.
The exposure forced Enron to restate its accounts and file for bankruptcy in October.
Even while the fraudulent practices were going on, Anderson had consistently certified Enron's financial statements.
When Enron's scandal came to light, Anderson reportedly began to shred documents relating to its auditing work with Enron.
The auditing firm's reputation had been smeared a few years ago when another of its clients, a religious social services organisation, failed, following disclosures that it had been fraudulently stating its operations and finances.
In the wake of the latest scandal involving Enron, many of Arthur Anderson's clients and employees have reportedly been defecting.
The Times report, based on information from persons involved in the deal, indicated that discussions were ongoing between Anderson and Deloitte and a decision was yet to be reached on whether the firm would be sold in whole or in pieces.
The discussions so far are focused on how Deloitte would avoid assuming legal and financial liabilities incurred by Anderson from its dealing with Enron.
Anderson is facing criminal charges, possible regulatory sanctions from the US Securities and Exchange Commission and several lawsuits from individuals and Companies hurt by the failure of Enron.
It is believed that if a deal is ultimately reached, Anderson's name may just disappear completely as the deal is more likely to be a buy up than a merger.
The Times report said the deal with Deloitte could involve Anderson selling its foreign operations, with the US operations left to negotiate and settle its liabilities in the country.
An Anderson spokesman, Patrick Dorton was quoted to have declined to confirm the talks, but said the Company was considering options that will enable it continue to serve its clients and the careers of its employees.
"We are committed to making changes to our business that will restore the public's trust, enhance the quality and independence of our audit practice and allow all of our practices to thrive," he said.
Similarly, a spokesman for Deloitte, Paul Marinaccio would not confirm the talks, saying rather that Deloitte "has been conducting ongoing scenario planning in response to the current and projected state of the profession.
" In the wake of the Enron scandal that has burned Anderson, all top five auditing firms in the world have announced they would stop rendering consultancy services to the Companies they audit, a practice that is considered to pose conflicts of interest.
Based in Chicago, Anderson had revenue of 9.
3 billion dollars for the year ended 31 August 2001.
It employs 85,000 people in the 84 countries where it has operations.
New York-based Deloitte operates in 140 countries and has 95,000 employees globally.
The largest of the five auditing firms, it earned a revenue of 12.
4 billion dollars for the year ended 31 May 2001.
The other auditing firms in the top five brackets are Ernst and Young, Price Waterhouse-Coopers and KPMG.

12 مارس 2002 11:22:00




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