"Big Five" accountancy firm KPMG has announced the sale of half its Channel Islands operations to Dresdner Bank. KPMG is selling Orbis, its trust and company administration services business which employs employs about 30 staff in Jersey and 50 in Guernsey, partly in response to a US regulatory crackdown on alleged conflicts of interest in the audit profession.
Orbis will now be integrated with the Kleinwort Benson Channel Islands group of companies, which are wholly owned subsidiaries of Germany's Dresdner Bank and have over 350 staff members and deposits of more than £2.4bn. It has not been revealed how much Dresdner paid for Orbis, which currently administers more than 1,200 trusts and companies with £2.5 billion under administration. However, a senior figure in Jersey's financial services industry said he would be surprised if Dresdner had paid less than £50m for Orbis, which also offers tax planning and compliance services.
KPMG did say that it had decided to sell Orbis because of tighter US rules forcing the big accountancy firms to cut back on the services they offer worldwide. The Securities and Exchange Commission (SEC) has put forward proposals to stop accounting firms offering many advisory services to audit clients, on the grounds that these might compromise the independence of the audit. KPMG has voiced its fierce opposition to these changes, arguing that the conflict-of-interest problems cited by the SEC do not exist. Charles Clarke, senior partner for KPMG in the Channel Islands, said: 'Even the current rules were quite restrictive on what we could do.'
Nonetheless, Mr Clarke said it was excellent news for the firm’s clients and staff that Orbis was being acquired by Dresdner Bank. He said: 'The strategic fit of the management teams and business will produce many new and exciting opportunities for all concerned.'
Orbis will continue to be the preferred supplier of fiduciary services to KPMG Channel Islands and their clients. Andreas Georgi, a member of the board of managing directors at Dresdner Bank, said that KPMG’s fiduciary services business was one of the most respected in the Channel Islands. He said: 'There is significant potential for business synergies between our two operations and this acquisition fits well with the Dresdner Private Banking international strategy of developing wealth management services for European private clients.'
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