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EY's internal war.

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EY has been thrown into dis­ar­ray by an internal war over its plan to split in two after its US boss said the deal would have to be paused.

Lead­ers at the Big Four firm were caught off guard on Wed­nes­day when US head Julie Boland told part­ners on a call that the pro­posed split of EY’s audit­ing and con­sult­ing busi­nesses was on hold and needed to be rene­go­ti­ated.

Global chair and chief exec­ut­ive Car­mine Di Sibio sought to reas­sure staff yes­ter­day that the sep­ar­a­tion of the busi­nesses would go ahead.

But cur­rent and former EY part­ners and staff said Di Sibio and other lead­ers who mas­ter­minded the break-up should leave if they could not make it hap­pen. There would be a lead­er­ship trans­ition if it did not go ahead, a per­son famil­iar with EY’s plans said.

EY’s move to spin off its advis­ory arm, includ­ing con­sult­ants and most of its tax prac­tice, into a lis­ted com­pany has run into a series of delays since it became pub­lic in May. Di Sibio, who has led EY since 2019, was given a two-year exten­sion to his four-year term to see the deal through des­pite reach­ing EY’s usual man­dat­ory retire­ment age of 60 this month.

Sup­port­ers of Di Sibio, who would lead the spun out con­sult­ing busi­ness, blamed Boland for «pos­tur­ing» and caus­ing an unne­ces­sary pub­lic row. But, one former col­league said: «Car­mine is noth­ing if not stub­born. He may yet see this through».

To make the deal hap­pen, Di Sibio will have to per­suade EY’s 13,000 part­ners to line up behind it. EY part­ners and staff received a flurry of emails from bosses yes­ter­day as they attemp­ted to limit the fal­lout. Mes­sages to UK part­ners, seen by the FT, included FAQs and sug­ges­ted answers to ques­tions from cli­ents. An email from UK boss Hywel Ball said: «We remain com­mit­ted to the stra­tegic rationale that under­pins Project Everest and believe that a deal can and will be done».

For the EY split to pro­ceed, part­ners in its largest coun­tries, par­tic­u­larly the US and UK, would have to agree in coun­try-by-coun­try votes.

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