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PwC Australia says staff involved in tax leak face ‘severe’ consequences
Global Banking & Finance Review®
Company
By Lewis Jackson
SYDNEY (Reuters) -PricewaterhouseCoopers Australia staff who are found to have acted improperly in a scandal over the leaking of government tax plans will face “severe” consequences, acting chief executive Kristin Stubbins told a state parliament inquiry on Monday.
In her first public appearance since her predecessor resigned over his involvement in the scandal, Stubbins said an investigation by two law firms would conclude “shortly” and the firm will name any staff found to have “done anything wrong”.
“We have failed the standards we set for ourselves as an organisation, and I apologise on behalf of our firm,” Stubbins said.
PwC Australia is under fire after a former partner who was advising the federal government on laws to prevent corporate tax avoidance shared confidential information with colleagues who then used it to pitch to multinational companies for work.
The firm has already placed nine partners on leave and named four former partners directly involved in the breach who have since left the firm. Two of those four have publicly denied any wrongdoing.
Stubbins faced a New South Wales state parliamentary inquiry a day after the firm announced plans to sell its government consulting business for A$1 ($0.67) and a further leadership shakeup as it responds to a scandal that has led government agencies and major pension funds to freeze work with PwC.
PwC’s initial decision in May to ringfence its government consulting practice and set up a separate board “didn’t go far enough”, said Stubbins. PwC Australia would receive no financial benefit from the A$1 sale, she added.
Roughly 1,500 staff and over 100 partners would go across to the new entity, which will be set up as a corporation with the help of private equity firm Allegro Funds and launched around September.
The move will cut PwC Australia off from the “vast majority” of public sector consulting work, although some external audit work for government clients may stay, said Stubbins.
Stubbins took over from former chief executive David Seymour in May after he admitted he was one of at least 67 staff who received emails containing confidential government plans to curb multinational tax avoidance leaked by a former partner at the firm between 2014 and 2017.
She will remain in the role until Kevin Burrowes, currently Global Clients & Industries lead based in Singapore, relocates to Australia for the job.
($1 = 1.4950 Australian dollars)
(Reporting by Lewis Jackson; Editing by Diane Craft and Sonali Paul)
Financial management involves planning, organizing, directing, and controlling the financial activities of an organization. It aims to manage the firm's financial resources effectively to achieve its goals.
Compliance refers to the process of adhering to laws, regulations, and guidelines set by governing bodies. In finance, it ensures that organizations operate within legal and ethical standards.
A financial crisis is a situation where the value of financial institutions or assets drops significantly. It can lead to widespread economic disruption and loss of confidence in financial systems.
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