PwC baulks at implicating global partners in Australian tax scandal

PwC says Australian partners involved in distributing confidential tax advice face being exited from the partnership.

Embattled accounting firm PwC is looking closely at which international partners are exposed to the firm’s leak of confidential Australian tax information, as expectations mount that their names will be revealed in federal parliament.

PwC is already facing a number of investigations as it seeks to get to establish the scope of the scandal and the federal government and corporate regulator review the leak.

PwC made millions of dollars advising international companies how to avoid or minimise paying tax in Australia, based on confidential information it had received from the Australian government.

Documents released by parliament show the firm assembled a list of almost 53 current and former PwC staff who were on a string of emails investigated by regulators.

The correspondence, provided by the Tax Practitioner’s Board, redacted the names of all partners except Peter Collins, but clearly shows they are partners in the US, UK, Ireland and Asia Pacific region.

PwC has refused to reveal how its international investigation, being led by law firm Linklaters, is proceeding.

“We are not answering specific questions at the moment, however our statements make clear the actions we are taking, the independent law firm we have retained, the reviews we are undertaking,” PwC’s London-based director of global corporate affairs and communications, Mike Davies, told The Australian.

Tom Seymour has resigned as PwC’s Australian chief executive.

Politicians are now calling for these names to be revealed, which could trigger job losses at the highest level of PwC across the world.

In Australia, some former partners at PwC, aware their names are among the redacted emails, are now worried that they may lose their jobs at their current firms.

The growing scandal has already cost PwC Australia chief executive Tom Seymour his job, and two other partners of the firm stepped down from their roles on the firm’s executive board.

PwC global general counsel Diana Weiss, and its tax and legal leader, Carol Stubbings, flew into Australia last week.

Speculation is mounting that PwC is trying to establish the extent of wrongdoing beyond these shores.

Ziggy Switkowski has been appointed by PwC to review its Australian operations. Picture: John Feder

It announced on Monday that corporate veteran Ziggy Switkowski would run a review of its Australian operations as it seeks to head off criticism.

Dr Switkowski will lead the independent investigation of the Australian business, which will look at leaking of the tax information, as well as a broader cultural review of the partnership.

PwC said the review could result in “where appropriate, exiting further people and partners from the firm”.

It’s possible that if these names come to light it will trigger a flow of job losses by PwC current and former staffers who did not respect the code of conduct of the firm, which “describes a common set of expectations for our conduct, a key element of which is that we abide by applicable laws and regulations,” according to the PwC website.

The Australian government is also investigating PwC and the breach of confidence over the tax matters.

The Australian understands the government is waiting on an investigation currently being undertaken by Treasury.

Labor Senator Deb O’Neill said PwC should reveal the names of all staff involved in the tax information leaks.

Senator Deborah O'Neill. Picture: Martin Ollman

However, she said she had concerns about the nature of the investigation.

“Mr Switkowski is coming in, he is paid by PwC to investigate PwC, to deliver a report to PwC and at the end if they decide they might dribble out a summary of the bits the public wants to know or the bits they want the public to know,” she said.

“The reality is it’s not independent when it’s paid for by the entity that’s being investigated; that’s an in-house job and continuing to use the word ‘independent’ just reveals the continuing contempt that the current team at PwC have for what I think is now a demand from the Australian people that they are transparent.”

Senator O’Neill said if PwC attempted to stonewall the parliament it could face further inquiries.

“Should we call a royal commission? We may yet end up there and if we do it will end up all about the consulting companies and all assurance companies,” she said.

The parliament is already scrutinising the use of consultants by the government.

Greens Senator Barbara Pocock said she had seen legal advice that said PwC and members of the firm should be referred to the Australian Federal Police over the tax breach matter.

“These are serious offences and according to the legal advice, if they are proven they would trigger further action under the Proceeds of Crime Act to recover any profits that were made from the commission of the offences,” Senator Pocock said.

Originally published as PwC baulks at implicating global partners in Australian tax scandal