KPMG offers huge benefits to Samjong

By Kim Tae-gyu

Staff Reporter

KPMG, a global network of professional firms providing audit, tax and advisory services and based in the Netherlands, may offer generous benefits in order to maintain the relationship with its Korean member company Samjong, which once mulled over moving to KPMG's rival Ernst & Young (E&Y).

A local Internet media reported this week that KPMG will provide $45 million over the next three years while promising independent management during the next five years.

It added that KPMG Chairman Timothy Flynn is poised to visit Korea to finalize the agreement.

E&Y purportedly attempted to put both Han Young and Samjong under its umbrella, taking advantage of the conflict between Samjong and KPMG, which tried to dominate control of Samjong.

Rumors have it that E&Y offered to present millions of dollars and guarantee multiple years of management rights to Samjong Chairman Yun Young-gak as Korea's regional representative of E&Y.

The talks broke down last month and observers say that KPMG probably pledged some major benefits to rein in its Korean member company Samjong, the No. 2 player in Asia's fourth-largest economy.

Industry watchers said the contract details would act as a benchmark when other global accounting companies renew their contracts with their Korean partners.

KPMG was not available for comment.