Andersen buttering up its clients

FORMER Enron auditor Arthur Andersen is mounting a charm offensive among its UK clients in a bid to cling on to lucrative contracts. Over two weeks, teams of top executives have been doing the rounds of corporate clients to reassure them that standards will not be compromised.

Andersen's biggest British client, BSkyB, has received the red carpet treatment, as the loss of its account would be a grave blow. Last year, BSkyB paid Andersen £600,000 for auditing and £13.8m for other services. Cadbury Schweppes, Amvescap, Airtours, Canary Wharf and WPP are also audited by Arthur Andersen, but none will say whether it plans to switch.

'Andersen is trying to reassure everyone, but we are waiting to see how the Enron situation develops before deciding what to do,' said a source at one company.

Andersen has told clients it will be extra vigilant because it is under the spotlight. It plans to take an especially tough stance on any questionable items in firms' accounts. After the collapse of Enron, which had been reporting $1bn-plus profits, this is welcome.

In the US, hospitality group Hard Rock Hotel has already axed Andersen as its auditor and further fallout is expected. Airtours will be the first UK firm held to account by shareholders. At its annual general meeting on Thursday, corporate governance consultancy PIRC will call for Andersen's audit contract not to be renewed.

Andersen said it has been encouraging all partners and senior managers to make face-to-face contact with clients. Every client has received a letter and a private fact sheet, addressing the 'myths and realities' about Andersen and Enron.

Concerns about Enron's debts are growing after Enron Europe administrator PricewaterhouseCooper told creditors that EE had 'billions' of dollars of liabilities.