There was no popping of champagne corks at Andersen's SAR office when the Hong Kong and China practices announced they would join forces with PricewaterhouseCoopers' (PwC) Hong Kong and China practices. Managing partner of the Hong Kong office, Allan Aw, said yesterday that as an 'Andersen man' he was saddened to break away from the global network. The network, Andersen Worldwide SC, has been struggling to survive since its United States partner, Arthur Andersen, became embroiled in the Enron scandal. However, Mr Aw denied the defections of the Hong Kong and China offices - the first in the worldwide partnership - could start an avalanche which could bring down the Andersen empire. Andersen's Russia practice broke away hours after Hong Kong and China on Thursday, followed by the New Zealand firm which yesterday merged with Ernst & Young. 'China and Hong Kong are not that important, how could we start an avalanche? In the global context we are a very small part of this global machine,' Mr Aw said. He said Andersen chief executive Joseph Berardino had been 'very sympathetic' when he and Greater China managing partner Albert Ng phoned him with their decision on Thursday morning. 'We've been friends for a long time, we're partners. Now, obviously we have our differences, but legal issues aside hopefully we'll remain friends.' Mr Aw confirmed Andersen's Hong Kong and China partners had attended a presentation by KPMG International in Singapore, but said they had never been in talks with KPMG practices in Singapore, Hong Kong or China. While Andersen Worldwide had clearly recommended a global deal with KPMG outside the US: 'It was still up to [each] country to negotiate, we never got to that stage.' Mr Aw denied the PwC agreement - which surprised many - was a last minute deal. He had always been open-minded about looking for the best fit for the company and people. Andersen area general manager Asia Pacific, John Prasetio, yesterday said he appreciated the need for some countries to move faster than what the company could offer under the global proposition. 'Their decision will not diminish the effort to substantially complete transactions between Andersen Worldwide's non-US member firms and KPMG.' His milder comments contrasted with those from Andersen spokesman Charlie Leonard yesterday, who said Andersen's international partners were not completely free to leave the firm. 'They have very specific obligations to the other member firms . . . financial and otherwise,' he told Reuters. Mr Aw said he still believed the Hong Kong and China practices would not be penalised. 'Under the current unusual circumstances it must be reasonable to expect member firms to be able to leave the Andersen Worldwide organisation without having a penalty imposed,' he said. 'I said I would like to depart amicably from Anderson Worldwide. So far I haven't heard from them,' Mr Aw said. Last night second-tier accountants Baker Tilly International said it - and any firm wanting to become a global provider of accounting services - would still be interested in an alliance with Andersen in Hong Kong and China. 'You can't sign up a multi-partnership arrangement in a day, so who knows what will happen tomorrow,' Rupert Purser, managing director of the Hong Kong office, said.
