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Logo of Phnom Penh Post newspaper Phnom Penh Post - Tensions at DFDL prompt creation of new firm

Tensions at DFDL prompt creation of new firm

Two partners and about 20 employees at DFDL, a regional law firm that has consulted on some of Cambodia’s biggest investment projects over the past 16 years, stunned the company last weekend with an announcement of their departure to start a new tax advisory outfit.

The departing partners, who were based in Phnom Penh, yesterday said that months of negotiations to restructure DFDL’s tax unit had proved unsuccessful, leaving them no choice but to leave.

Edwin Vanderbruggen, now a former DFDL partner and managing director of the company’s tax and customs practice group, claimed that he and fellow partner Jean Loi had held discussions with management about the company’s tax division – and leaving the firm entirely – since at least the middle of last year.

Those talks had proved unsuccessful, Vanderbruggen said.

“Something had to be done. These talks were dragging on and it wasn’t confidential anymore, and it was affecting the spirit and atmosphere in the office,” he said, claiming that DFDL employees, clients and competitors knew of the office tensions.

DFDL, however, said in a statement that it was caught unawares by the move and claimed that the partners were under obligation to the firm.

“Appropriate measures” would be taken in response, it said.

“We were surprised and disappointed to learn about Edwin Vanderbruggen’s and Jean Loi’s sudden departure from DFDL,” the firm said.

“The path chosen by Jean and Edwin is in conflict with their obligations to the firm.

“DFDL is taking the appropriate measures in this regard while carrying on servicing our clients in our core areas of expertise, including tax advisory,” according to the statement.

The company did not specify what those obligations were or the exact measures being taken in response, and declined to answer follow-up questions from the Post yesterday.

But DFDL did say that further statements about Vanderbruggen and Loi’s departure may be coming this week.

Vanderbruggen and Loi originally described their split with DFDL as amicable, but were forced to retract those statements once DFDL released its statement to the press.

In an email on Saturday titled, “Farewell from the DFDL Tax Team”, Vanderbruggen said that he, Loi and the other departing DFDL employees would be “pursuing our career in tax services in a new professional capacity”.

Loi, who worked for more than a decade with PricewaterhouseCoopers in New Zealand, Cambodia and Vietnam prior to joining DFDL in 2011, was named in the email as Vanderbruggen’s partner in the new venture, VDB Loi.

The email said a group of 19 tax professionals working for DFDL, largely in Cambodia but also in Vietnam and Singapore, would join VDB Loi.

“We leave our friends at DFDL on good terms and we wish them every success,” Vanderbruggen said in the email.

Vanderbruggen and Loi said yesterday their goal was to create a tax and legal consultancy for businesses seeking to invest and operate in Southeast Asia.

VDB Loi was up and running in Cambodia, Vietnam and Singapore, and would soon add an office in Laos.

“If you want to deliver a real solution to the client, you need to be able to provide a very integrated tax and legal solution” to them, Vanderbruggen said, with Loi adding that the firm “can offer a one-stop shop for all my clients”.

When first reached by phone yesterday, they reiterated their claim that the split from DFDL was amicable.

“DFDL’s an excellent firm,” Vanderbruggen said.

“These guys are my friends. I think they understand we all want to pursue our careers in our own way.”

Loi also claimed their departure was a positive one, saying, “From my point of view, this has been an amicable split.”

However, DFDL’s statement rejected that notion.

“Contrary to what they may have suggested in recent communications, this separation was not made with our consent and knowledge, and is not amicable.”

DFDL also disputed the claim the partners had left with “our entire team of tax advisers”.

“This is incorrect and misleading,” the statement said.

“DFDL has a strong and loyal team of highly qualified tax advisers ensuring continuity of quality tax services to all our existing and future clients.”

When asked about DFDL’s response, Vanderbruggen said he did not know of any obligations to DFDL that prevented him, Loi or the other employees from starting the new business.

He claimed only that there were some “financial consequences” for partners, though he did not elaborate on what those consequences were.

Vanderbruggen also declined to comment on whether DFDL knew about the departure prior to Saturday’s email, or about which DFDL clients planned to follow him to his new firm.

“Once the dust has settled, I’m very confident we’ll have a very nice practice,” he said.

Dun Kosal, a senior adviser for tax compliance in DFDL’s Phnom Penh office, said yesterday he did not know of Vanderbruggen’s decision to leave until Saturday’s email.

Most of the tax team in Cambodia seemed to have left, he said, “except me”.

Dun Kosal said he had largely no reaction to the news, and was waiting for word from the company’s remaining partners  on what would happen next.

“I’ll go to work as normal … and we’ll see.”

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