Andersen Indonesia in no hurry to merge

Andersen Indonesia in no hurry to merge

Adianto P. Simamora, The Jakarta Post, Jakarta

Arthur Andersen's affiliate in Indonesia says that it is in no
hurry to join the merger frenzy of its Asian peers, but would
closely watch their developments, as its U.S. parent unit faces
criminal charges that may lead to Andersen's demise.

Business "is running as usual" said Soemarsono S. Rahardjo,
Andersen's managing partner here of the local accounting firm,
Prasetio Utomo.

Worldwide, however, Andersen partners see clients deserting en
masse amid news the once-venerable accounting firm could collapse
under the weight of criminal charges brought against it by the
U.S. government.

Employing some 1,000 staff members, Soemarsono said, Andersen
Indonesia has seen clients come and go, but added that no one has
left because of what was happening elsewhere.

This comes as partners across the U.S., Europe and Asia
scramble to stay afloat by joining their rivals, who hope to grab
a slice of Andersen's assets.

Merger deals surface rapidly, yet Andersen's Indonesian unit
appears to be staying aloft amid the frenzy.

"We wait for instructions from headquarters on the planned
merger ... there is no need to jump to a decision now,"
Soemarsono told The Jakarta Post on Thursday.

His statement comes as Andersen partners in Singapore, New
Zealand and Australia agreed to join with Ernst & Young.

In Thailand, Andersen partners sided with KPMG, while those in
Hong Kong and China merged with PricewaterhouseCoopers.

Soemarsono said that Andersen was able to retain its business
here despite the credibility blow since the collapse of U.S.
energy giant Enron, due to questionable off-balance sheet
transactions which Andersen in the U.S. failed to audit.

Probes were launched into Enron's downfall. But Andersen irked
investigators when it admitted to have ordered the shredding of
audit documents - a move that landed it a U.S. government
indictment for obstructuring justice.

Its Indonesian unit has also come under the spotlight
recently.

Last month, a report by the Asian Wall Street Journal raised
questions over Andersen's accounting practices in Indonesia and
Singapore.

Andersen had been the auditor for Indonesia's troubled giant
pulp and paper company Asia Pulp Paper (APP).

Singapore-based APP deferred payment on some US$13 billion in
debt last year, in one of Asia's largest defaults in history.

Amid the maelstrom Andersen is in, Soemarsono said that its
clients here were only curious about the case unfolding in the
U.S., but remained loyal nonetheless.

The clients "know who we are, they don't need to be
reassured," he said, adding that Andersen had lost no clients
because of the Enron case.

He declined to name his clients, but said that they numbered
more than 100, and included multinational companies.

But with storm clouds hanging over Andersen, Soemarsono could
not rule out a merger with its rivals just yet.

"We're watching developments on a day-to-day basis," he said.

He said that he had met KPMG, and Ernst & Young to explore the
likelihood of a merger, but said that talks had been informal.

"If, one day, things get really worse, then we will go for a
merger," he said.