Court papers reveal PwC’s claimed reasons for sacking partner Richard Gregg

PwC and Richard Gregg have set out their claims against each other in court as the former tax partner takes action over his removal.

PwC has detailed its claim against partner Richard Gregg as it seeks to push him out of the firm, Picture: Damian Shaw

PwC told partner Richard Gregg the decision to remove him from the firm was not linked to findings he “misused the government’s confidential information” as part of a flurry of legal letters between the two sides, court documents show.

But the papers filed with the NSW Supreme Court have shed light on PwC’s reasons for removing staff, including allegations Mr Gregg failed to “discharge his supervisory functions” when dealing with two high-ranking PwC staff in 2021.

Court documents have unveiled the tussle between Mr Gregg and PwC Australia over attempts to expel partners due to the tax scandal haunting the audit and consulting giant, revealing a further investigation into the firm’s accountants.

In his claim before the court, Mr Gregg has argued PwC failed to detail its reasons for attempting to remove him from the firm in July and possibly defamed his reputation by publishing statements claiming he had links to the tax scandal.

But in its defence, PwC said Mr Gregg had agreed to be stood down from the firm on paid leave and was aware of possible links to events surrounding the firm with lawyers referencing emails sent in August 2021.

Mr Gregg went to the NSW Supreme Court last week seeking an injunction in a bid to block PwC severing his partnership with the firm before a 14 day deadline expired.

Mr Gregg’s claims, published on Tuesday, show he will argue that PwC did not show an “alleged material breach of the Partnership Agreement”.

“These particulars must be sufficiently detailed and fulsome as to inform the partner of the specific conduct that is alleged and the basis on which that conduct is impugned, so as to afford the partner a meaningful opportunity to make responsive submissions,” Mr Gregg’s claim states.

Mr Gregg claims he was told to go on immediate special leave on May 28, when PwC demanded nine partners take leave pending the outcome of internal investigations.

“The plaintiff was not told by (acting CEO) Ms Stubbins or Mr Laithwaite why he had been placed on leave, how long he should expect to remain on leave, or the power pursuant to which PwC had placed him on leave,” Mr Gregg’s claim states.

Marcus Laithwaite is head of PwC’s partnership and a former member of the firm’s executive board from 2014 to 2016.

PwC’s then acting chief executive Kristin Stubbins. Picture: Jane Dempster

Mr Gregg claims a media release published by PwC on May 29, which revealed the firm had told partners to go on leave pending “the outcome of an ongoing investigation by PwC”, defamed him, noting that he had sent a concerns notice to the firm.

However, PwC in its defence, claims Mr Gregg agreed in writing to go on leave.

Mr Gregg, a PwC tax partner who joined the partnership in 2013, claims he repeatedly asked PwC, through his lawyers, for the firm to detail what parts of the partnership agreement, or any other document, was being relied upon to stand him down.

Mr Gregg claims that through this he was putting PwC on notice “that he did not accept that he had been lawfully placed on leave and reserved his rights to challenge the direction for him to go on leave”.

He claimed being placed on leave “was taking a significant toll on his health, wellbeing and reputation”.

On July 3, PwC sent Mr Gregg a two-page letter noting it had been recommended he be made to retire from the partnership – the same day the firm’s acting chief executive, Kristin Stubbins, published a statement which named him and stated he was being removed “as a result of the findings of PwC’s investigation”.

Mr Gregg claims this was done so despite repeatedly asking for 48 hours’ notice that he was going to be named.

PwC again contacted Mr Gregg on July 11, providing him “copies of certain documents” referred to in its letter of July 3 as well as “limited further particulars” explaining the decision to remove him.

This was this followed up on July 18 with two letters “rejecting Mr Gregg’s claim that the recommendation is invalid” as well as reportedly an acknowledgment the decision to make him retire was “not based on a finding or assertion that Mr Gregg misused the government’s

confidential information”.

“Notwithstanding the terms of the 3 July statement and the 18 July letters, PwC has made no public statement indicating or clarifying that there is no finding or assertion by PwC that Mr Gregg misused the government’s confidential information or was involved in the PwC tax scandal,” Mr Gregg’s claim states.

PwC acknowledged this in its defence, noting the firm “acknowledges that management’s

recommendation to the board of partners that Mr Gregg be required to retire is not based on a finding or assertion that Mr Gregg misused the government’s confidential information”.

However, PwC claims Mr Gregg was found to have failed to “discharge his supervisory functions”, detailing emails sent from PwC national business leader Martina Crowley and corporate tax partner Wayne Plummer on August 17, 2021.

In his claims before the courts, Mr Gregg also revealed an investigation into the tax scandal by Chartered Accountants Australian New Zealand, announced in January, was picking up speed.

He said he received a letter from CA ANZ on July 3 detailing an investigation by the Professional Conduct Committee, but after being locked out of his inbox did not review it until July 14.

“PwC has taken no steps to indicate or clarify to CA ANZ that there is no finding or assertion by PwC that Mr Gregg misused the government’s confidential information or was involved in the PwC tax scandal,” Mr Gregg claims.

New PwC chief executive Kevin Burrowes, who landed in Australia on Monday, is one of 11 PwC governance board leadership named in the court papers.

PwC governance board chair Justin Carroll, deputy chair Clara Cutajar, partners Tracey Kennair, Adrian King, Joe Short, Norah Seddon, Paddy Carney, Paul Abbey and Sumanth Prakath, and partnership secretary Carolyn Sinclair are all named by Mr Gregg.

Corrs Chambers Westgarth head of class actions Chris Pagent is acting for PwC, while Company (Giles) principal and defamation lawyer Rebekah Giles is acting for Mr Gregg.

Originally published as Court papers reveal PwC’s claimed reasons for sacking partner Richard Gregg