Merger of International professional associations

[kamranACA]

Dears,

The SCI Management Board announced that it has reached agreement with the Board of Nexia International on a merger of the two networks from 1 December 2007. The merger of these two organizations will result in one of the leading international networks of independent firms in the world, anticipated to rank at least 10th in the IAB global rankings with

Coverage in 84 countries
Over 500 offices worldwide
Combined fee income US$2bn+ (2006)

The combined resources of the merged body will deliver strength of coverage in all the major global economic centres, and the resources to meet the increasingly diverse international requirements of members’ clients. In particular, the relative strength of the European and Asia Pacific regional groupings is demonstrated when the U.S. revenue of the major networks/associatio ns is removed from global revenues (2006); with combined revenues of US$1,591.2m, the merged body would be ranked 7th in the world, above RSM International, Baker Tilly and Horwath.

The merger will be achieved by Nexia offering membership to all existing members of SC International with effect from 1 December 2007 and SC International will cease to operate from that date.

Member of SCI in Pakistan is Riaz Ahmad and Company while member of Nexia International is S.M. Masood & Company. It is expected that both firms will continue to be the member of new merged association in Pakistan.

Regards,

[Schuaeb]

Informative article

[Schuaeb]

Kamran one more question, though I am not concerned, just my inquisitive nature.

Generally, when there is a merger of international firms, there associates in Pakistan also merge. We have seen quite some examples. Now this merger of SCI and Nexia should result in the merger of Riaz Ahmed and S. M. Masood. However, as per my information no such merger is very likely in Pakistan. Given the circumstances will both RACO and SMM will continue to be the members of this new merged firms (Nexia and SCI) or any of these have to quit membership. And if SMM is the firm which quits membership so it has to be categorized among smaller firms as already much of its clintele has been taken by the newly formed Hassan Naeem

[kamranACA]

Dear Shoaib,

I can certainly not comment on the upcoming decisions by local member firms about what has to be implemented in post merger arena of these international associations.

However, normally merger of local firms take place when their international counter parts are merged as has been witnessed in the case of PWC and Coopers where we saw merger of AFF and Coopers in Pakistan.

Still, there are cases where this has not happened. In case of KPMG, Riaz Ahmad and Company and Taseer Hadi Khalid and Company, both were members of KPMG in Pakistan, as per my information. This continued for some time and due to not agreeing on certain issues (including option of merger) Riaz Ahmad and Company, left the KPMG association.

In some countries there are more than one firms having membership of same international association and these are continuing in the longer runs.

For merger so many issues have to be settled down and satisfaction of local counterparts is extremely necessary, more specifically, where major issues are independence, quality, and integrity.

Let's see what happens regarding your question as I am also only a viewer of the situation like you having no concern with the issue.

Regards,


Kamran.

[Schuaeb]

The example of KTH and RACO as you mentioned confirms the point that if the associated firms do not agree to merge one of them has to leave membership. I guess that is why RACO left the association. Another thing which I have heard in this regard is RACO left the membership as its senior partner denied to retire at the age of sixty (which was against the agreement). I guess presently in Pakistan we do not have any example of two firms having association with single international firm

[kamranACA]

Dear,

There could have been so many issues when the question of merger arises and we cannot base our conclusion simply to what we have generally heard. Of course no one wants to lose identity, power and share and last but not least the empire that has been developed by his own hands with all the efforts and hard work of the life time, which a common man cannot even think about.

There is no example of two firms in Pakistan having membership of a single international firm/association.

However, it is very common in rest of the world.

Regards,


Kamran.

[noman]

does a firm with name of cooper & lybrand exist in islamabad?

[Schuaeb]

Should CA firm be considered as empire that has been developed by one's own hands? Such thinking gives rise to family firms as is the case with aforementioned firms i.e. RACO and SMM. In my view a firm created and developed on such grounds can't grow beyond a limit. And what if you aquire an empire build by someone else and makes it yours, I think this is the case with RACO.

[kamranACA]

Dear Shoaib,

Considering some firm established / upgraded by some one's own hands as his empire does not mean to do some un-ethical / non-professional things.

You must appreciate that world wide the concept of merger / uniting of interests, has elapsed and lost its attraction /validity. Now every merger is to be considered as Acquisition where one acquirer could be identified based upon certain identification criterion.

If some one feels his practice as his empire and do not intake partners and professionals, in this era, he cannot even think to get or maintain good business clientele. But if some one thinks that he should have been given a leading role as every thing has been actually developed by him and others having all the rights to vote in favor or against any proposal should in generality follow his advises, being senior and pioneer, in my view it is not wrong.

Further, keep in mind when you see big business/professional practices, you must be given to understand that these are not being run without rules, procedures and systems. Big (or moderately big) concerns remain big only if they have systems and procedures. And yes, no one should be above the board when we talk about rules and procedures. Not even pioneers. I give you assurance.

Where this does not happen, (as you mentioned about some recently broken firm), the businesses face the disastres.

There is no room for one man show.

When I used the word "EMPIRE" it was meant for a situation where the new comers having no sacrifices and time inputs make their minds to share every thing without contributing anything. People in so many such cases forget the concept of goodwill. They dont wnat to put in but wish to take out. This should not be considered justified.

I am certainly not talking about any firm spcifically.

Regards,



Kamran.

[alishan]

First of all you guys are lying about Combined fee income US$2bn+ (2006)
because even kpmg failed to achieve this target and that only pwc could achieve this feet.
How could a damn lowclass firm achieve this target

[kamranACA]

Dear Alishan,

I just wonder how illiterate you are about such specific things and how proudly you declare the others as liers.

As far as earnings are concerned the international earnings roughly go as under (year 2006)

PWC USD 20 Billion plus

Deloitte USD 18-20 billion

E & Y USD 15 - 16 billion

KPMG USD 14-15 billion


I dont remember the exact figures, as I have already quoted some where at this forum, but I firmly believe that these fall within above range.

Just search on wikipedia.com or some other search engine.

USD 2 billion etc is a very low figure, in the world wide perspective.

And yes, dont open your mouth without confirming the things, this is just an advice.

Regards,


Kamran.

[Schuaeb]

<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by kamranACA</i>
<br />Dear Shoaib,

Considering some firm established / upgraded by some one's own hands as his empire does not mean to do some un-ethical / non-professional things.

You must appreciate that world wide the concept of merger / uniting of interests, has elapsed and lost its attraction /validity. Now every merger is to be considered as Acquisition where one acquirer could be identified based upon certain identification criterion.

If some one feels his practice as his empire and do not intake partners and professionals, in this era, he cannot even think to get or maintain good business clientele. But if some one thinks that he should have been given a leading role as every thing has been actually developed by him and others having all the rights to vote in favor or against any proposal should in generality follow his advises, being senior and pioneer, in my view it is not wrong.

Further, keep in mind when you see big business/professional practices, you must be given to understand that these are not being run without rules, procedures and systems. Big (or moderately big) concerns remain big only if they have systems and procedures. And yes, no one should be above the board when we talk about rules and procedures. Not even pioneers. I give you assurance.

Where this does not happen, (as you mentioned about some recently broken firm), the businesses face the disastres.

There is no room for one man show.

When I used the word "EMPIRE" it was meant for a situation where the new comers having no sacrifices and time inputs make their minds to share every thing without contributing anything. People in so many such cases forget the concept of goodwill. They dont wnat to put in but wish to take out. This should not be considered justified.

I am certainly not talking about any firm spcifically.

Regards,



Kamran.

<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

Nothing for me to disagree in your post. However, sometimes I found more verbose instead of sticking to the point.

[Pracs]

Mergers at local levels is a whole process with quite a few hurdles. The Coopers - AFF merger took around 3 years plus after the international merger,...

[XBRL]

Hi all. Well merger and pakistan both are fun. The miserable partner meet each other and say, hey our dads got one, lets do it locally otherwise they will disown. I have seen 2 effective local mergers.

[XBRL]

The aff coopers where a small staff was practically stored in huge aff. The other one at almost equal scale resulting in rhoddies (sarak chhap is the wrd used by the merged sidats) and the sidatiya (a kammi) as retaliated by FR ppl.