Andersen names new chief executive

Andersen said most of its US tax partners would join rival Deloitte & Touche, as the world's fifth-largest accounting firm, which faces a criminal charge for its role in the Enron scandal, headed further towards disintegration.

The move comes as Andersen named a new chief executive for its worldwide operations, which are also splintering as deals are hatched with different "Big Five" rivals.

In the US, where Andersen is bleeding clients and is expected to cut a quarter of its 28,000 domestic staff next week, Andersen agreed that most of its tax practice partners would join rival Deloitte. Andersen has not said how many partners, out of 1,620 in the US, work on tax services. It gave no details of the deal, which it said could close by the end of this month.

The move is aimed at countering criticism that accountants raking in consulting and tax fees go soft on companies' audit. Andersen's US tax services bring in about $1 billion (€1.1 billion) in revenues a year, according to outside experts. Andersen has about $4.3 billion in annual US revenues, split roughly equally between audit and non-audit services. The non-audit services comprise tax and consulting practices.

Andersen spokesman Mr Patrick Dorton did not say how many employees would be laid off but did confirm that job cuts were imminent.

"Given the indictment by the Justice Department of the entire firm, it is inevitable that there will have to be some personnel reductions," he said.

In London, Andersen announced its acting worldwide chief executive would be Europe-based Mr Aldo Cardoso, the front-runner for the job. He replaces US-based Mr Joseph Berardino, who quit last week in a move designed to help the embattled firm survive.

Mr Cardoso (46), managing partner for France and also chairman of Andersen Worldwide's board, faces a difficult task trying to salvage Andersen's rapidly fragmenting international network of businesses.

Many experts expect a bankruptcy filing unless Andersen can soon come to a settlement with the US Justice Department over a criminal charge of obstruction of justice for shredding Enron-related documents.

Mr Cardoso takes over after the breakdown of Andersen's global merger talks with KPMG and will now shepherd the various mergers under negotiation between Andersen member firms around the world and the remaining "big four" global accounting groups. - (Reuters)