KPMG breakaway takes clients along

By IRENE CHAPPLE

The rather nicely named corporate recovery practice - the work, in the public eye at least, is more corporate collapse - is apparently not all dry and dusty.

So says Kerryn Downey, the managing partner of KPMG breakaway McGrath Nicol & Partners.

There was that time he boarded a plane to be sat next to the very fraudster he was chasing, one who had ripped CA$25 million from an automotive warranty scam.

"We shared a drink," says Downey. "He even drove me to my hotel." The fraudster knew exactly who Downey was, "But he was Mr Teflon man". The story ended well: Bad guy in jail, good guy Downey back at his Canadian KPMG office.

Anyway, that's an aside. Point is, after 23 years at KPMG, the past six in New Zealand, Downey and fellow partner William Black have left, taking a team of eight with them.

From this week, the new offices of McGrath Nicol are open, in the same building as KPMG.

Big jobs, including the collapse of training centre Carich, have come with them. They have retained a "best friend" status with KPMG.

The split was amicable, triggered as it was by KPMG's bank clients introducing independence policies after the collapse of United States energy giant Enron. That began a domino-like reshuffling around the world as corporates sought to distance themselves from accounting and auditing cosiness.

KPMG's banking clients informed the auditor it could not provide other services for them, including corporate recovery work.

So, the corporate recovery team split to create McGrath Nicol and Partners, a name adopted from KPMG's Australian breakaway. The clients have come back.

"It's a good change," Downey says. "A nice change."