Receivership - Andersens feels TransTec heat.
The English ICA is under pressure to investigate Arthur Andersen following further revelations that cast doubt over the firm’s objectivity in working as receiver to TransTec, writes Lucinda Kemeny. Following the news that the Big Five firm could be in breach of institute rules because of its previous work for the company, it has emerged that Andersens launched a joint venture with HSBC two years ago – the creditor responsible for the firm’s appointment to TransTec. The initiative established the Thames Turnaround Fund – an alternative financing vehicle for companies in difficulty. Institute rules say a member should decline an insolvency appointment ‘if he or a principal or employee of the practice has such a close and distinct business connection with the floating charge holder (bank) as might impair or appear to impair a member’s objectivity’. HSBC said: ‘Arthur Andersen has checked its conflicts and has confirmed that there are none. The banks are confident that there are no conflicts.’ An Andersens official said banks and creditors would not make appointments where they felt a conflict might exist and in this case were aware of the fund’s existence.