PracticeConsultingKPMG pushes ahead with consultancy share offering plan

KPMG pushes ahead with consultancy share offering plan

Frustrated KPMG has lodged an official request with the US Securities andExchange Commission to give clearance for a public shares offering on its new consultancy arm, it has been reported.

Failure by the SEC and professional regulators the Independence Standards togive a clear ruling on the IPO plan has prompted the Big Five player to opt foran official filing.

The move comes after an 18 month ruling wait by KPMG since first revealing itswish to launch an IPO and as Big Five competitors Ernst & Young and PwC steamed ahead withtheir own restructuring.

KPMG are reported today in the Financial Times to be seeking to raise up to£600m from the offering and to retain a 19.9% stake in its consultancy offshoot.

Industry watchers believe that retaining almost a fifth of the new company couldcome up against serious opposition from the SEC, which has the power to blockIPOs.

Concerns have been raised by the SEC about the independence of theconsultants, but KPMG have stressed that the company will not use the firm’sname, no KPMG accountants will sit on its board and the parent firm’s stake willbe divested by 2005.

‘As a result, we will no longer be obligated to comply with the rules andregulations governing the independence of auditors from their clients,’ the KPMGfiling states.

IT provider Cisco Systems will also hold a 19.9% in the new company.

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