WILLEMSTAD - Ernst & Young (EY) Dutch Caribbean "fundamentally disagrees" with the conclusion and decision of the Fair Trade Authority Curaçao (FTAC) to impose a fine on the accountancy and consultancy firm of 400,000 guilders.
It is the first time that the FTAC has imposed a fine. EY will not accept it and will appeal. "The fine was imposed on EY for not (timely) reporting a concentration," the competition watchdog said in a press statement. “The FTAC is of the opinion that EY should have reported to the FTAC at the beginning of 2019 the acquisition of control over (parts of) KDC Interim, since 1 January 2019 the trade name under which accountants and advisors of the former KPMG Dutch Caribbean were housed.”
EY explains that in 2018 and early 2019, they held discussions with the directors of KMPG/KDC about a possible takeover of the accountancy and consultancy branches of KPMG. “EY informed the FTAC in a timely manner that if these talks lead to a takeover, it would report the takeover to the FTAC in accordance with the National Ordinance on Competition.”
The reason for the talks with KDC was that KPMG International would end its activities in Curaçao at the end of 2018, explains Ernst & Young. At the end of 2018, KPMG also withdrew the license to use its name in Curaçao. Shortly afterwards, KDC ceased its activities as an accountant. “In mid-February 2019, EY decided not to take over KDC. EY immediately notified KDC of this decision in writing and formally terminated discussions with KDC.”
EY is not saying anything about this now, but it is well known that some of the KPMG staff and also the customers switched to Ernst & Young. EY, in its own words, subscribes to “the principle that mergers and acquisitions must be notified in advance to the competition authority” and points out that almost all countries in the world have a rule that mergers and acquisitions may not be concluded until they have been notified and approved.
“Nowhere in the world, however, do preparatory talks or conditional agreements need to be reported. The transfer of a customer or an employee is also not seen as a merger or acquisition. EY believes that this is also the case in Curaçao. That is why EY is appealing the decision of the FTAC.” The office looks forward to the outcome of the appeal with confidence.