The return of a big name
The SA big five accounting firm that sank with its US parent in the wake on Enron’s collapse is back — as a tax and legal firm
Nearly two decades after closing shop in SA, Andersen Global is testing the market again by partnering with local law firm Tabacks.
But the global firm is a whole different animal. In its earlier iteration Andersen still had a first name — Arthur, as in Arthur Andersen. And gone is the auditing practice that caused the entire business to implode in the wake of the Enron scandal.
Andersen is now a tax and legal business, and the move is part of a worldwide expansion strategy that has taken it into 47 countries by either getting local firms to collaborate with it or choosing a much closer integration by taking them on board as full “members”.
In the case of Tabacks, a firm that has its roots in the many mining mergers & acquisitions (M&A) of the commodity supercycle in the early 2000s, the deal is a collaboration.
The step plugs the local firm into Andersen’s worldwide network while, at least for now, retaining its own brand.
And for Tabacks the deal is just what it needs to fit into the mould of a “super boutique” firm, chair David Woodhouse tells the FM.
Though SA’S economy is hardly showing growth, the undercurrents that drive business for multinational companies are still strong. Complex cross-border structures still need to manoeuvre through the legal maze created by different jurisdictions.
“With the influx of foreign multinationals the work is actually increasing,” says Derrick Kaufmann, Tabacks’ director of corporate and commercial law. And the work includes M&A, structuring, transfer pricing and tax, among other things.
“Transfer pricing has historically been done by accountants in SA,” he adds. “But that is changing.”
Lawyers are getting in on the act. That chimes with what is happening in the US, where lawyers have a much larger share of the business.
With the amount of data analysis and technical skills involved, firms also benefit from having international partners as it helps them recruit the people they need. And it is handy in acquiring the business of multinationals which already operate in SA and have strong ties with Andersen in the US or other jurisdictions.
“SA has been the traditional business hub for Africa, and though other regions are expanding, it remains the headquarters for many companies, which makes it a very important market to us and our global clientele,” says Andersen Global chair and Andersen Tax CEO Mark Vorsatz.
Despite Arthur Andersen’s