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Grant Thornton US arm distances itself from Italy

Grant Thornton's key US unit has said it started reaching out to clients and employees in a bid to distance itself from its Italian counterpart tainted by the Parmalat fraud.

In an interview, Grant Thornton LLP's Chief Executive, Ed Nusbaum, said he had told partners to reassure clients the US firm would be unaffected by the Parmalat crisis. A conference call among partners at the firm has also been scheduled for Wednesday to discuss the matter, he said.

“We are asking our partners and our employees to talk to clients, if appropriate to send letters, whatever steps are necessary to get our clients comfortable with the fact that Grant Thornton will emerge stronger and healthier,” Mr Nusbaum told Reuters. “I'm confident that our clients and our people and the business community at large will understand that Italy is a very small piece of Grant Thornton worldwide.”

The US firm is also considering starting an advertising or promotional campaign to get its message out, Mr Nusbaum said.

The chairman and senior partner of the accounting firm's Italian affiliate, Grant Thornton SpA, were arrested last Wednesday after magistrates' accused the unit of cooperating and devising the multi-billion euro scandal at Parmalat.

Grant Thornton was Parmalat's primary auditor until 1999, when Deloitte took over, but continued auditing certain subsidiaries including Bonlat, a Cayman Islands-based unit that claimed to have a 3.95 billion bank account that later turned out to be fictitious.

The accounting firm's international network initially stood firmly behind its Italian arm, calling itself a victim of fraud and stressing it followed all the correct auditing procedures. Last Wednesday, it finally suspended the two executives under arrest, days after Italian media had reported the men were under investigation and a fortnight after the discovery of the scandal at Parmalat.

Mr Nusbaum said his firm was not disappointed at Grant Thornton International's handling of the scandal, but said the statements were reflective of the cultural differences between Europe and the United States.

“There's cultural differences between Europe and the United States in the way all these things are discussed and handled,” said Mr Nusbaum. “The comments about being a victim were coming out of the Italian firm and we just say things differently in the US We wouldn't make those kind of comments.

“Grant Thornton International is working with the Italian firm in trying to be both supportive, but also at the same time investigative as much as we can and learn whatever we can.”

Like other top accounting firms, Grant Thornton member firms worldwide are separate legal entities and say they do not share liability stemming from the actions of one unit. The US unit is the largest, both in terms of employees and revenue, within Grant Thornton's worldwide network.

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