Responding to CFO Innovation’s interview with Albert Au, chairman and CEO of BDO Hong Kong, about the transfer of former Grant Thornton Hong Kong partners and staff to BDO, Grant Thornton International has come out with some strong words.
Grant Thornton Responds: 'They Were Expelled'
“Grant Thornton expelled its former Hong Kong firm in September,” said Hilary East, head of international communications at Grant Thornton International. “They did not choose to leave, they were told to leave.”
Many partners in Grant Thornton Hong Kong supported Grant Thornton International’s strategy of crafting an integrated approach to serving clients across China, including Hong Kong, East said, but “their leadership was unable to agree amongst itself and separation became the only option.”
The company described as “disingenuous, or possibly wishful thinking” what it saw as BDO’s suggestion that Grant Thornton is pulling out of Hong Kong. “Many partners and staff from the former Hong Kong firm have already contacted the new Grant Thornton firm,” East said. “Clients will, of course, decide for themselves whether to move to BDO, or remain with the integrated, ‘one firm’ approach of Grant Thornton.”
In the interview with CFO Innovation, BDO’s Au said that he does not “get” why Grant Thornton is “turning a 500-strong firm into a 100-person branch.” Hong Kong is not just any city, Au said. “You’ll have to ask them the rationale they have in their strategy.”
CFO Innovation subsequently spoke to Alex MacBeath, the member of Grant Thornton’s global leadership board with responsibility for strategy in Asia Pacific, who stressed that Grant Thornton is not downgrading Hong Kong. “We expect the firm in Hong Kong to grow very quickly,” he said. “We’re adding partners, we’re adding staff . . . They will have a very strong say and be a very strong participant in any governance and management structure for the firm.”
“Our clients are driving us, and I think will drive other firms, to an integrated approach to the China market,” MacBeath added. “It’s not about one firm controlling another firm. It’s about firms working closely together, being strategically aligned and serving the clients seamlessly across the market.”
The plan is to have two main offices, one in Beijing for the China operations and the other in Hong Kong. “Those partners will be working together and they will be jointly on the board. Decisions will be made looking at the market as a single market and in the best interests of clients,” said MacBeath.
He noted that Grant Thornton is not the only accounting firm moving towards the new model of an integrated network, as opposed to the traditional model of independently owned and run partnerships working together as an international network. “In other parts of the world, you’re seeing an increasing integration,” he said. “A couple of the Big Four have moved to regional structures in Europe and the Middle East. I believe one of the Big Four has an increasingly integrated Asia strategy. It is something you will increasingly see in Asia.”
CFO Innovation will publish the edited transcript of the interview with MacBeath later in the week.