More of PwC face investigation as firm refuses to hand over key report into tax scandal

The Tax Practitioners Board says it does not need a report PwC commissioned into international links to its scandal in order to make a case against nine staff, but would like it.

PwC chief Kevin Burrowes at the Senate inquiry. Picture: Martin Ollman

Investigations into PwC Australia’s tax scandal are creeping towards a painful conclusion, but attempts by parliament and regulators to unmask international partners who misused confidential information have been stonewalled by the firm’s global leadership.

PwC’s new local chief executive, Kevin Burrowes, offered to apologise to the Senate, “if that’s what you want me to say”, after revealing he had been unable to secure a tell-all review into the tax scandal commissioned by PwC International.

Mr Burrowes, appearing for the second time before the Senate’s Finance and Public Administration Committee, said his attempts to secure a copy of a report by law firm Linklaters had been frustrated by his former ­colleagues.

Mr Burrowes was appointed PwC Australia CEO in July, after an exodus at the top of the audit and consulting giant, joining the local operation after almost three years in Singapore leading PwC International’s global clients business and sitting on the firm’s global leadership team.

Senator Deborah O'Neill asks a question during Friday’s hearings. Picture: Martin Ollman

The career consultant said he had requested the report after telling the Senate’s inquiry into management and assurance of integrity by consulting services last year that he had not been given a copy of Linklaters’ findings.

“I formally requested the Link­laters report again from PwC International Limited, and that request was refused on the basis that the information contained in that report is privileged,” Mr Burrowes said

He said the local firm had tried to put the tax scandal to bed, telling the Senate PwC was planning to independently verify the firm’s “commitment to change”, with a review slated for the fourth quarter of 2024.

But senators took aim at the PwC boss and the firm’s carefully worded statement, which found that six members of the firm received the tax information but did not know that it was confidential.

Greens senator Barbara Pocock said PwC was treating Australians like “mushrooms”, while Liberal senator Richard Colbeck said the firm was trying to erect a “brick wall” to stop the scandal spreading to other countries.

PwC has said these six PwC staff “should have raised questions as to whether the information was confidential”, noting some had been disciplined but they remained with the firm.

“All I can say is as is highlighted by PwC International Limited the six individuals suffered ­appropriate consequence management to the extent they are still with the firm,” Mr Burrowes said.

Tax Practitioners Board chairman Peter de Cure. Picture: Kelly Barnes

Tax Practitioners Board chairman Peter de Cure said that, although he had not seen the Linklaters report, he had a good idea who the “Dirty Six” partners identified in PwC’s summary of its findings were.

“I have a reasonable idea that they’re in New York and I think somewhere in California, but that’s an inference from what I’ve read,” he said.

“I’ve read the relevant emails. I didn’t read them for the purpose of trying to conclude who the Dirty Six are.”

But Mr de Cure said the TPB did not need the report “to make our case here”, as the regulator ratchets up nine investigations into the tax scandal.

Mr de Cure said three of these probes were nearing their conclusion, which could see former PwC Australia tax figures face bans and deregistrations from the field.

Mr de Cure said the outcome of these cases was likely to influence the TPB’s next steps in its remaining six investigations into PwC staff.

PwC is also staring at an Australian Federal Police investigation after Treasury referred the scandal to police last year, the second time the matter has been flagged.

The Australian Taxation Office first floated the scandal in front of the AFP in 2018.

The ATO told the Senate its investigations into the scandal had been repeatedly frustrated by PwC, which early on engaged in a heavily contested battle over legal privilege, while more recently denying access to the Linklaters review.

ATO second commissioner Jeremy Hirschhorn said PwC’s “emphasis” in its statement about the knowledge of international partners “of the existence of a signed confidentiality agreement” were very different to “knowledge from confidential information and appropriate participation in a consultation process”.

“I think it is very important to distinguish whether personnel from PwC knew that a confidentiality agreement had been signed or whether they reasonably knew it was a breach of a confidential process,” Mr Hirschhorn said.

Senator Barbara Pocock listens to proceedings on Friday. Picture: Martin Ollman

PwC came under fire early last year after it was revealed the firm had deliberately misused confidential government tax documents shared by the former head of international tax, Peter Collins.

Mr Collins had signed multiple confidentiality deeds with Treasury as part of an unpaid consultation over plans to introduce the Multinational Anti-Avoidance Law in 2016, aimed at stopping large companies shifting profits offshore and avoiding paying tax.

Mr Hirschhorn said the ATO was aware of “lots of interest” in the scandal from international regulators, with the tax office “working closely with others”.

But he said any hope international regulators may be able to squeeze the report into the scandal from PwC International were likely to be frustrated by legal professional privilege claims: “We share the frustrations of this committee that an organisation which claims to be co-operative is deliberately hiding behind the difference between their local firm and the international firm.”

PwC International, which hosts many of its staff in Australia, has played a key role in responding to the scandal, sending in a squad of executives to seize control of the Australian firm and pushing local boss Tom Seymour to quit after he was linked to the breaches of confidentiality.

Originally published as More of PwC face investigation as firm refuses to hand over key report into tax scandal