Posted on: Tuesday, June 18, 2002

Andersen weighing options in Hawai'i

By Dan Nakaso
Advertiser Staff Writer

Partners in the local office of Arthur Andersen LLP are moving forward with options for the company's future in the wake of the recent problems that have beset the Hawai'i company's parent firm.

Managing partner Randy Karns said yesterday that the partners hope to make a decision by the end of the month on several possible courses of action, including the possibility of buying the firm and continuing it under a new name.

"We're working on plans to move forward," Karns said. "One of the options is to be locally owned. We haven't yet come to a definitive agreement so we're still in the talking stages."

Since it was charged with obstruction of justice in March, Andersen has lost most of its largest audit clients worldwide and has agreed to sell consulting, tax, audit and other businesses. However, Karns said Hawai'i customers "have been very, very supportive" and the local office has not lost any of its clients.

It also has agreed to stop auditing public companies by the end of August, and has been stripped of its license to practice in some states and faces billions of dollars in civil-suit claims.

On Saturday, a jury in Houston convicted the world's fifth-largest accounting firm of obstruction of justice for shredding and deleting files to hamper a federal investigation of Enron Corp.

Karns said that while Andersen has agreed to sell consulting, tax, audit and other businesses, the local partners want to continue to do auditing work and are looking at how to make this possible.

He declined to specify other possibilities.

The local office has been one of O'ahu's largest accounting firms but is down from about 70 employees to 45 to 50 now, said Karns, who attributed the drop to the "cyclical nature" of the business.