Two member firms of BDO International Ltd., the world’s fifth largest accounting consultancy, could merge in Hong Kong in the near future as they seek to resolve a row over business issues, a report said Wednesday.
The companies involved are the BDO Ltd. and the Hong Kong unit of BDO China Shu Lun Pan Certified Public Accountants LLP, according to the Hong Kong Economic Journal.
BDO Ltd., established in Hong Kong in 1981, is the fifth largest accountancy firm in the city. It has grown under the leadership of Albert Au, who had once served as the president of the Hong Kong Institute of Certified Public Accountants.
The company had earlier been in a spat with BDO China Shu Lun Pan Union (HK) CPA Ltd, the Hong Kong unit of BDO China Shu Lun Pan, over business operations in the city.
The business conflict arose as Chinese authorities encouraged mainland accounting firms to enter markets overseas.
BDO China Shu Lun Pan joined the BDO network in 2000 and is now the sixth largest accounting firm in the mainland.
As of the end of June, there were 113 listed companies out of a total of 1,689 in Hong Kong, under the audit of BDO Ltd.
Though the mainland network is a major shareholder of the Hong Kong firm BDO Ltd., the two firms are financially independent, cooperating only when serving Hong Kong-listed mainland companies and sharing the profit from such work.
However, earlier this year, the mainland BDO network set up a branch in Hong Kong and has poached senior auditing services professionals from BDO Ltd.
This has caused resentment and also led to disagreements on profit sharing between the two firms, sources familiar with the matter were quoted as saying.
Stephen Darley, BDO International’s Hong Kong-based Asia Pacific chief executive, told HKEJ in an email that the two member firms are highly respected within the network, and that they have close ties.
Darley, however, did not give any hint about the potential merger, the report said.
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