BDO International sells 10% JV stake to Indian partner Haribhakti
MUMBAI: BDO International, the $6-billion Belgium-based audit and accounting firm, will call off its four-year joint venture BDO India with Haribhakti Consulting by selling its 10% stake to its Indian partner, a senior company officials said.
"We have decided to purchase BDOs 10% stake at the cost they invested to purchase the stake in 2008," Shailesh Haribhakti chairman Haribhakti Consulting said in a telephonic interview from Indonesia.
BDO, which takes the name from three of its founding members Binder Hamlyn from United Kingdom, Dijker and Co of Holland and Germany's Otte and Co, offers risk and advisory services, tax, regulatory and global knowledge services in 138 countries with 55,000 employees.
The foreign firm teamed up with six-decade-old Haribhakti in 2008 and later inducted the joint venture BDO India into its worldwide network. "Unfortunately we are unable to respond at this time due to the holidays," BDO International spokesperson said in a email response.
Institute of Chartered Accountants of India ( ICAI), a statutory panel to regulate Indian chartered accountants, does not allow foreign auditors to own stake in Indian chartered accounting firms. But, foreign investments are allowed in consulting firms like BDO's investment in BDO India., where Shailesh Haribhakti is the chairman. He is also the partner of the auditing firm - Haribhakti & Co.
"This is managed by forming a private limited company where foreign firm is having equity stake," says Vinod Ambavat, partner at Ambavat Jain and Associates LLP, a chartered accountant. ""The referral on audit work is managed by keeping the stake of foreign partner little higher in private limited companies," he added.
The split is the second for the Belgium firm after it broke off in 2008 with Kolkatta-based Lodha and Co owned by late RS Lodha.
Indian consultants team up with foreign partners as it gives them an exposure to a pool of international clients and receive higher fees for their services including entry strategies to India, advise on Indian tax laws and to find partners.
"The fees received from foreign clients are normally higher than the referral fee paid to global partners," says a senior partner at a global audit and consulting firm. Referral fees are money paid to global partners for bringing in their clients work to the venture.
"That is the reason why Indian accounting firms look for alliance with international firms." the senior partner quoted earlier said. He cannot be quoted as firm does not allow partners to speak on rivals.
MUMBAI: BDO International, the $6-billion Belgium-based audit and accounting firm, will call off its four-year joint venture BDO India with Haribhakti Consulting by selling its 10% stake to its Indian partner, a senior company officials said.
"We have decided to purchase BDOs 10% stake at the cost they invested to purchase the stake in 2008," Shailesh Haribhakti chairman Haribhakti Consulting said in a telephonic interview from Indonesia.
BDO, which takes the name from three of its founding members Binder Hamlyn from United Kingdom, Dijker and Co of Holland and Germany's Otte and Co, offers risk and advisory services, tax, regulatory and global knowledge services in 138 countries with 55,000 employees.
The foreign firm teamed up with six-decade-old Haribhakti in 2008 and later inducted the joint venture BDO India into its worldwide network. "Unfortunately we are unable to respond at this time due to the holidays," BDO International spokesperson said in a email response.
Institute of Chartered Accountants of India ( ICAI), a statutory panel to regulate Indian chartered accountants, does not allow foreign auditors to own stake in Indian chartered accounting firms. But, foreign investments are allowed in consulting firms like BDO's investment in BDO India., where Shailesh Haribhakti is the chairman. He is also the partner of the auditing firm - Haribhakti & Co.
"This is managed by forming a private limited company where foreign firm is having equity stake," says Vinod Ambavat, partner at Ambavat Jain and Associates LLP, a chartered accountant. ""The referral on audit work is managed by keeping the stake of foreign partner little higher in private limited companies," he added.
The split is the second for the Belgium firm after it broke off in 2008 with Kolkatta-based Lodha and Co owned by late RS Lodha.
Indian consultants team up with foreign partners as it gives them an exposure to a pool of international clients and receive higher fees for their services including entry strategies to India, advise on Indian tax laws and to find partners.
"The fees received from foreign clients are normally higher than the referral fee paid to global partners," says a senior partner at a global audit and consulting firm. Referral fees are money paid to global partners for bringing in their clients work to the venture.
"That is the reason why Indian accounting firms look for alliance with international firms." the senior partner quoted earlier said. He cannot be quoted as firm does not allow partners to speak on rivals.
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