Deloitte, Ferguson talk merger

It8217;s action time in the accounting world. Talks are reportedly on between Deloitte, Haskins Sells and AF Ferguson for a possible merg...

It8217;s action time in the accounting world. Talks are reportedly on between Deloitte, Haskins 038; Sells and AF Ferguson for a possible merger. While there has been speculation on the possibility of AF Ferguson being merged with another accounting firm for some time now, the move is believed to have now gained momentum.

When contacted, sources in the know confirmed that there have been 8220;preliminary8221; discussions on a possible merger, but no concrete timeframe has yet been firmed up for the purpose. 8220;All I can say is that it is preliminary,8221; the source said.

Deloitte or Ferguson officials could not be reached for a formal comment despite several attempts.

Sources say that Deloitte will pick up all clients, net assets and most staff; however the fate of seven senior partners is not known. What is not clear is whether these seven are partners who are on a post-retirement AF Ferguson pension or those who form a part of the core team today. Ashok Mahindra, AF Ferguson8217;s managing partner is due to retire in another six months and a tie-up to decide the future of the firm seemed imperative, say accounting industry sources.

However, both sides are being cautious. 8220;Two of the Deloitte member firms are over 70 years old and don8217;t want to leave anything to chance. Hence, there8217;s no timeframe yet,8221; a top accounting source explained.

AF Ferguson has been hunting for a tie-up with one of the Big Four accounting firms ever since the 2002 controversy over Tata Finance, which saw the exit of its senior-most partner Y.M. Kale. Even today, the Tata group accounts for a big chunk of its score or so major assignments.

However, it has suffered badly with nearly a dozen accounts having moved away, including Zuari Agro, Cadburys, Forbes, Pfizer, Syngenta, Novartis, Godfrey Phillips, and Elchem. It has given up a part of the HLL work.

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Since then, the firm has been in talk with PWC, Ernst 038; Young and KPMG, but none of the deals worked out. The PWC deal fell through after protracted negotiations between the two accounting firms. The tie-up with Deloitte too has gone through a now-on-now-off phase before the present arrangement was finally hammered out.

A clear-cut merger is being seen as particularly important in the context of the problems being faced by Ernst 038; Young E038;Y, which recently saw some partners leaving owing to unresolved issues arising from the global merger of Arthur Andersen and E038;Y Worldwide.

Deloitte Haskins 038; Sells in India comprises four accounting member firms 8211; SB Billimoria 038; Co., CC Choksi 038; Co., Fraser 038; Ross and PC Hansotia 038; Co.

The firm operates through 13 offices and has over 1400 employees.

Ferguson, on the other hand, has seven offices in India and two in West Asia.