Accounting firm PwC Australia has announced to sell its government business to another firm for a mere A$1 after a scandal revealed in January rocked the company’s boat. In early 2023, it was revealed that an ex-partner of PwC Australia had leaked classified documents to one of his colleagues, who used them to pitch to potential clients. The ex-partner was working as an advisor to the Australian government.
‘Shocking breach of trust’
According to a report by BBC, the accused partner had leaked the drafts of corporate tax avoidance laws, amounting to a major violation of standards set by PwC. The leaks took place between 2014 and 2017, however, the company clarified that the confidential information was not used to help clients evade taxes.
Earlier this month, PwC Australia declared it had compiled a list of 76 current and former partners who it believes were involved in the scandal and handed it over to Australian lawmakers.
Former chief executive of PwC Australia Tom Seymour was also found involved in the scandal as he admitted to being one of at least 67 recipients of the classified information in May. He later stepped down from his post. Australia’s Treasurer Jim Chalmers called the revelations a “shocking breach of trust”.
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PwC Australia’s acting chief executive Kristin Stubbins on Monday assured a parliamentary inquiry that those involved in the scandal would face “severe consequences”. “We have failed the standards we set for ourselves as an organisation, and I apologise on behalf of our firm,” she was quoted as saying by BBC.
New Chief Executive announced
PwC Australia named Kevin Burrowes as its new Chief Executive on Sunday and he is tasked with “working with his colleagues and management team to re-earn trust with PwC Australia’s stakeholders,” as per a statement by Justin Carroll, the chair of PwC Australia’s governance board.
Since the revelation of the scandal, officials and politicians in Australia have repeatedly called for boycotting PwC in awarding government contracts. Major pension funds including AustralianSuper, as well as the country’s central bank have already declared their intentions to not sign any new contracts with the scandal-hit company.
Official data states that the Australian government is committed to contracts with PwC worth A$255mn. PwC Australia will sell its government business, which accounts for 20 per cent of its total revenues, to private equity firm Allegro Funds, and it hopes to reach a binding deal with the firm by the end of this month.
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