'Personal credibility was never in doubt'
Bobby Parikh, former India chief Andersen and the new CEO of Ernst & Young, shares his thoughts on the recent past and what lies ahead, with Savio G Pinto and V Phani Kumar.
Why did you prefer Ernst & Young? Couldn't Andersen continue to remain an independent entity?
We have been with the Andersen network all these years and it was increasingly evident that this network is not going to be available going forward.
The network is basically made up of the partners, the people, the brand and the reputation.
The last two have taken a beating due to the events which unfolded in the US. As a result clients would have become uncomfortable, not wanting their financial statements signed by Andersen.
While they were not uncomfortable with the people and the teams, it was just the name. That is the power of the brand which had got impaired significantly. As a result we had to find a different brand to operate under since the personal credibility was never in doubt.
Was it also a legal issue which compelled you to take this step?
No. It was never a legal issue or one of liability. It was a pure and simple business issue as to how do you run your business.
If the brand under which you run your business is affected then you have two choices. One is to say you will work without a brand or to work with another brand.
Both has its pros and cons but we think that a network has its own strengths and that is the reason why we adopted this path.
Why Ernst & Young, when you had several options?
Its been a very difficult decision to make and we have had discussions with several others as well. After analysis of most of the hard facts like size, growth and other elements, it still boils down to the gut feel where you have to make that decision.
After considering everything and debating it in different ways we felt that this was the right decision to make. That in no way reflects on any of the other organisations but then at the end of the day you can choose only one.
What does this merger mean for employees and clients?
For employees it gives them a platform of a very powerful organisation which will offer them the opportunity to focus on many areas and specialise in many others which would have not been available otherwise.
It provides the critical mass which would have been lacking. As for clients its the same thing played out in a different way. We will now be able to provide them the services which they want but which would have been impossible if not for this arrangement.
What did you have to deal with in your organisation after the scandal broke out in the USA?
Its been quite an experience and I wouldn't wish it on anyone. Its been very trying and obviously the employees have been concerned.
We don't think we have done anything that deserves this situation and you feel quite helpless since events beyond your control are dictating your destiny. We had to keep talking to our people and reassure them that we would work out something and that whatever we do would be in their best interests.
Your feeling about all this?
Obviously there is a lot of emotions involved with this decision. While we are relived that we have reached the decision and can look forward with no more stress but instead focus on what lies ahead, there is no doubt sadness that an organisation which we are very proud of and which we have been associated with all these years will no longer be existent.