PwC Australia says staff involved in tax leak face ‘severe’ consequences

Sydney - PricewaterhouseCoopers (PwC) 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, Ms Stubbins said an investigation by two law firms would conclude “shortly” and that the firm would name any employee 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,” she 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 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.

Ms 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

(90 Singapore cents) and a further leadership shake-up, 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 ring-fence its government consulting practice and set up a separate board “didn’t go far enough”, said Ms Stubbins. PwC Australia would receive no financial benefit from the A$1 sale, she added.

Roughly 1,500 employees and more than 100 partners are to go across to a 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 would cut PwC Australia off from the “vast majority” of public sector consulting work, although some external audit work for government clients might stay, said Ms Stubbins.

She took over from former CEO David Seymour in May after he admitted he was one of at least 67 employees who received e-mails 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 Mr Kevin Burrowes, currently the global clients and industries lead based in Singapore, relocates to Australia for the job. REUTERS