Cadbury: We're sticking by Andersen

DRINKS and sweets giant Cadbury Schweppes is determined to press on with its plans to reappoint embattled accountancy company Andersen as its auditor.

Cadbury, which is one of Andersen's biggest British clients, will call on shareholders at its May AGM to vote to retain Andersen, despite Andersen's London branch being accused of destroying documents connected with the collapse of Enron in the world's biggest bankruptcy.

Chief executive John Sunderland declared his support for Andersen last month, before Andersen's London office became directly embroiled in the scandal.

And this weekend, Cadbury is continuing to stick by Andersen. A Cadbury spokeswoman said: 'We are very satisfied-with Andersen and will be proposing their reappointment.' But she added: 'We are reserving the right to review the situation.'

Cadbury paid Andersen £2 million in audit fees and a further £3 million for advisory services in 2000.

Enron auditor Andersen was charged with obstruction of justice by a US federal grand jury last week because it had destroyed Enronrelated documents.

Analysts say Andersen now faces an exodus of clients that could lead to its demise.

Accounting rivals Ernst & Young and Deloitte Touche Tohmatsu last week pulled out of separate merger talks with Andersen because of worries about the Enron case.

In America, drugs company Merck, the Federal Express distribution group and Delta Airlines have all dropped Andersen as auditor after the debacle. And UK engineering firm Mayflower has become the first major British client to ditch Andersen because of the scandal.

Businesses that want to stick with Andersen when its services come up for renewal at annual meetings may face embarrassing shareholder revolts.

The board of tour operator Airtours recently endured a hostile annual meeting where Andersen's re-election was strongly opposed by a minority of investors.

Andersen's other big British corporate customers include pay-TV operator BSkyB and advertising agency WPP.