Partners continue to seek
Hawaii Andersen office

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By Dave Segal
dsegal@starbulletin.com

Arthur Andersen LLP, whose death verdict was sealed with Saturday's guilty conviction for obstruction of justice, probably will cease to exist in Hawaii in the new few weeks.

But that doesn't mean the partners and employees in the state's lone office will have to sever their relationships with their clients. It's just that they will conduct business under a new name or possibly as employees of another Hawaii accounting firm.

Ross Murakami, who with partner Randy Karns has been negotiating to buy the local office from the parent, did not return a telephone call yesterday. However, his office issued a statement in response to the jury's decision.

"We are disappointed with the verdict," the statement said. "However, irrespective of what further action the government takes in pursuing this case, the local partners of Andersen continue to work on plans to move forward as a locally owned professional services firm.

"We believe this plan is the best for our staff and clients with whom we continue to maintain strong relationships. We plan to make a formal announcement once the details are finalized."

Some states, according to Bloomberg News, have stripped Andersen's local offices of their license to practice and the firms are facing billions in civil-suit claims.

No such move is planned in Hawaii, however, since the state's Board of Public Accountancy only licenses individuals, not firms.

"Chapter 466 of the Hawaii Revised Statues makes a provision that each individual in order to practice accounting has to have a license and a permit to practice public accountancy," said Laureen Kai, executive officer of the Board of Public Accountancy. "The statute also requires that firms be mandated to have a permit to practice, but it's never been implemented."

Kai said the trial of Arthur Andersen's parent and the resulting guilty verdict has not triggered any investigation in Hawaii.

"There's nothing before the board at the present time involving Arthur Andersen misconduct or any other action," Kai said.

Kai said the Hawaii partners would need to get approval from the board for the firm's new name if they buy the local office, but that it would be approved as long as the name wasn't misleading to the public and as long as the partners had a license to practice.

Despite not initiating any action from the Hawaii board's end, Kai said the state has received communication from the Colorado attorney general's office asking whether Hawaii would be interested in opening a collaborative investigation against Arthur Andersen.

"But due to the fact that we don't license accounting firms, we told them the board would not be participating in such a joint effort," Kai said.