Ormerod in the hotseat
On the frontline: Andersen's Enron entanglement in the US has handed a poisoned chalice to the UK chief.
The 13 minutes 20 seconds that John Ormerod, managing partner of Andersen UK, spent on Newsnight a couple of weeks ago has to be the most nerve-wracking of his professional life.
Not even a year into his job and he was forced to defend the integrity of his firm – in which he has spent his entire professional life – over the collapse of Enron and Andersen’s confession in the US that it had shredded documents and ‘made an error in judgement’.
It did not make pleasant viewing. In media lingo he was ‘kebabbed’ by Jeremy Vine, one of the BBC’s toughest interviewers.
The thrust of Ormerod’s defence was to argue there were broad lessons to be learnt from the collapse of Enron. Vine replied that since Ormerod could not explain what happened, how could he draw any lessons?
It must have been a moment that smarted and Ormerod must have asked himself why Newsnight was chosen for his very first public utterances on the Enron scandal and the failure of his Andersen colleagues in the US.
Newsnight had been intended as a quick way for Ormerod to reassure ‘thousands’ of UK clients of the firm’s integrity. It may, however have left them wondering about the wisdom of its PR strategy.
Ormerod, 52, joined Arthur Andersen (as it was then) in 1970 and qualified as a chartered accountant in 1973. In 1981 he was bestowed the honour of joining the partnership. From 1995 until appointment to the top job in March last year he was head of the firm’s technology, media and communications practice in Europe, the Middle East, India and Africa.
By all accounts confident that UK partners will remain untouched by claims for damages from investors in the US, Ormerod is probably still wondering how much of a blessing being a partner will be.
At the back of his mind will be the fact that PricewaterhousCoopers continues to act as receiver of Enron Europe and is attempting to recoup creditors’ losses here.
Andersen UK could find its status as centre of attention quickly reintensified.
If that happens, Ormerod may be on the interview trail again. He has already appeared on the BBC’s Today programme, in the Daily Telegraph, the front page of the FT and in The Times. Seldom has an accountant garnered so much media attention.
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Though the integrity of Ormerod’s firm in the US has been questioned, he will have to stick it out and keep telling the UK corporate world that Andersen UK is sound. Pressed for interviews his excuse has been he is too busy seeing clients. As soon as the Enron story broke, he would have rushed to begin the process of reassuring the people that pay Andersen’s wages and profit shares. There will only be more of that on the horizon for Ormerod.