KPMG to Split off Australian Insolvency Practice
The KPMG practice that has worked on Australia’s most spectacular corporate scandals is being split off into an independent operation.
KPMG LLP announced its plans this week in an effort to prevent any conflicts of interest with its banking and financial services clients, the Wall Street Journal reported. The decision was prompted by the tougher regulations in the U.S. that cover consulting services by audit firms. In turn, many firms are splitting off their consulting practices.
The insolvency business in recent years has worked on the collapses of HIH Insurance, Pan Pharmaceuticals and the New South Wales Grains Board. At the same time, KPMG serves as auditor for banks that include National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd.
KPMG partner Tony McGrath said it was becoming more difficult to do the corporate insolvency work, because it would likely involve representing the same banking creditors.
McGrath and partner Colin Nicol, who headed the insolvency business, will manage the new firm, which will be called McGrath Nicol & Partners. All KPMG’s corporate recovery accounts and partners will move to the new operation. The new business, with 14 partners and 140 staffers, will start operations July 1 with offices in Australia.