ABN Amro’s Suitors Will Have Hard Time Finding An Independent Accountant

RBS ‘is in the dark’ over key Amro facts
“THE RBS-LED consortium battling to win ABN Amro admit they are in the dark about many of the “key facts” surrounding their £48 billion target.

A filing made to the US watchdog by one of the consortium partners, Banco Santander, revealed the muddy waters of any break-up of the Dutch bank, should the consortium overturn an agreed bid by rival Barclays. The filing, signed on May 28, revealed for the first time the details of the agreement Santander has with RBS and other consortium partner, Belgian-Dutch bank Fortis. According to the document, the partners acknowledge “they do not know many of the key facts relating to the ABN Amro Group, including the precise identity and ownership of the acquired businesses”.

Much of the final break-up remained to be “negotiated in good faith”, the document states, adding that “independent accountants” would be drafted in to settle any dispute between the trio…”

Let’s review the lineup:
Bank – External Auditor
ABN Amro – Ernst and Young (And KPMG for some strategic activities that may preclude their independence.)
Barclays – PwC
Bank of America – Potential Buyer of LaSalle Bank sub is also a PwC client.
Fortis – PwC and KPMG (Depends on business and geography.)
Royal Bank of Scotland – Deloitte
Santander – Deloitte

The RBS/Fortis/Santander consortium doesn’t seem to use E&Y as an external auditor, based on annual report info, but then their target, ABN, does. And that is not to say that E&Y is not providing services to one of them such as internal audit co-sourcing or another service which would preclude their independence.

I have mentioned before that I think PwC is the clear choice for external auditor of an eventual purchase by Barclays and win out on the LaSalle deal too, since Bank of America is also a PwC client. That’s good, since they’re probably going to be out of AIG and Dell soon! But their Advisory Practice had better get their act together. I’ve heard that they’re feeling the heat from their own internal Independence Compliance team to pull out of ABN consulting engagements “yesterday” but are resisting. They’ll lose a lot of money until the acquisition is final and the audit side (not the same partners, alas…) will start collecting for that appointment.