Fresh off the rumor mill: BDO USA has cut 85 people from advisory, announced via internal email from brand new advisory head Eskander Yavar to all of his service line this afternoon. We were provided part of the email which reads:
Today was a difficult day for our practice — we reduced our workforce by 85 professionals. Saying goodbye to colleagues is never easy, and we appreciate each individual’s contributions to our business and our firm. We wish them the very best.
It was only a few months ago that well-respected advisory leaders at BDO USA abruptly left the firm and left staff wondering what happened and why these partners seemed to hastily vanish almost overnight. We still don’t know what happened there though we do have some ideas.
We are digging around for more info, if you have some feel free to give me a shout.
Following up on our post from Wednesday on the movement of 600+ Grant Thornton Hong Kong employees to BDO, we’ve received some correspondence from Grant Thornton International that clarifies the situation.
Turns out, a brief press release – whole thing after the jump – was issued by GTI last month that announced that the firm had given notice (confirming speculation in the comments) to its HK firm to GTFO by March 2011.
In email to Going Concern, GTI spokeswoman Hilary East broke it down for us:
They did not choose to leave, they were told to leave. Success in China is critical to the long term ambitions of G are committed to an integrated approach to the China market, which includes Hong Kong. While many partners in the former Hong Kong firm supported that strategy, their leadership was unable to agree amongst itself and separation became the only option. Grant Thornton China immediately set up a new firm in Hong Kong, led by a group of partners from the original Hong Kong firm with support from the 1500 partners and staff across mainland China.
The new firm that Ms East mentions, presumably is Jingdu Tianhua Hong Kong which we mentioned in our previous post that will adopt the Grant Thornton name “in due course.”
But what about this article in the South China Morning Post that quotes BDO Hong Kong’s CEO as saying, “The opportunity to have a massive admission of so much established accounting talent is rare.” ?
Ms East elaborated for us:
[I]t is disingenous, or possibly wishful thinking, on the part of BDO to suggest that Grant Thornton is pulling out of Hong Kong. Many partners and staff from the former Hong Kong firm have already contacted the new Grant Thornton firm and clients will, of course, decide for themselves whether to move to BDO, which operates in the region as a loose affiliation, or remain with the more integrated, ‘one firm’ approach of Grant Thornton.
If you read the South China article, you won’t see a single mention of GTI giving the Hong Kong firm notice, unless you count the extremely vague and misleading passage:
Grant Thornton chief executive Patrick Rozario, who led the move to BDO, said the team decided to shift because of Grant Thornton International’s directive for the mainland member firm to lead Grant Thornton’s Hong Kong office.
“We consider BDO, which is run independently in Hong Kong and China, respectively, is a model that suits us better,” Rozario said.
No mention of the GTI press release. No mention of the new firm that GTI was setting up. No mention that some staff and partners were considering their options. The headline (and sub-hed) in the article is even ridiculously misleading: “Troubled accounting firm’s staff jump ship Grant Thornton to close as BDO gains full team”.
And why the article even brings up Gabriel Azedo’s disappearance is mystifying. It’s more than hella-stretch to suggest that the trouble caused by him has anything to do with GTI’s or BDO’s moves. Plus hardly anyone (including the Financial Times) gives a damn any more about his whereabouts. The guy has been on the lam for over a year and is probably some accounting Kurtz figure by now.
Apparently a grip (a half dozen or so) of them have left the firm in the past two months, says a source familiar with the situation at BDO. At least three are supposedly now with PwC (none worthy of P. Dubs press releases) and another two are off to Deloitte in various markets. If you’ve recently jumped Captain Jack’s ship or know of more details for your office, get in touch.
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