UK Andersen Denies Document-shredding 'smear'

Andersen's British operation today dismissed allegations of a coordinated destruction of documents at its London office as an "outrageous smear".

John Ormerod, the managing partner of the stricken accountancy firm's UK partnership, reacted angrily to suggestions that the London office was involved in the systematic shredding of Enron related papers.

At a press conference in London to discuss merger talks between Andersen's European operations with rival accountancy firm KPMG, Mr Ormerod said: "There was no destruction of material documents. That is an outrageous smear on our practice. We are moving on from that."

The London office has claimed that its destruction of Enron-related papers was part of a long-delayed and much-needed tidying up. UK Andersen's strong denials followed an indictment of Andersen in the US that has precipitated frantic efforts by the company's European operations to find a merger partner and keep as much of the worldwide Andersen network intact.

The US justice department's indictment last week said that the London office undertook coordinated destruction of documents just weeks before the spectacular collapse of Enron, once America's seventh largest company.

Mr Ormerod told reporters that he was confident that Andersen's European operations would not be exposed to any legal liabilities that may engulf Andersen in the US.

"As far as the UK operation is concerned, it is separate from the US operation," Mr Ormerod said. "I see no basis why those [liability] questions should be raised."

On plans to merge with KPMG, Mr Ormerod said: "Our two organisations complement each other well - both geographically and in people skills ... We have been keen to maintain the integrity of as much of the Andersen network as well. The proposed combination with KPMG achieves this."

A merger of the two would create a company with about 140,000 staff and $12.2bn in revenues outside the US. Andersen, the smallest of the "big five" accountancy firms, currently has 85,000 employees and $9.3bn annual revenues worldwide. KPMG has 100,000 staff and revenues of $11.7bn globally.

But any transaction faces the possibility of getting hit by Enron liabilities, by objections from competition regulators around the world and by the possibility that some national partnerships could decide to go it alone.