Eight partners to exit PwC partnership following tax avoidance scandal

PwC has concluded its investigations into the handling of confidential information and will cut ties with eight partners.

Consultancy firm PwC Australia has announced it will cut ties with eight partners after it was rocked by a tax avoidance scandal.

The professional services partnership launched an investigation into the handling of confidential Treasury information, after one of its partners, Peter Collins, allegedly leaked sensitive and confidential government information.

Mr Collins was the former head of international tax for PwC Australia, and was brought in to help the government design its multinational tax avoidance laws.

He signed three separate confidentiality agreements as part of that process, however it’s been alleged that he later breached that agreement by sharing confidential share information within PwC, with colleagues who were not authorised to receive it, a Tax Practitioners Board inquiry found.

PwC acting CEO Kristin Stubbins has announced PwC will cut ties with eight partners. Picture: Jane Dempster/The Australian.

The information was then allegedly used by PwC to market what were effectively tax avoidance schemes around the world.

Mr Collins’ registration as a tax practitioner was terminated for breaching the Professional Conduct in the Tax Agent Services Act 2009, which required that he must act honestly and with integrity, and to avoid conflicts of interest.

Earlier this year, a Senate estimates committee made public 144 pages of heavily-redacted emails from within PwC that referred to tax policy information that was “supposed to be secret”, with Treasury secretary Steven Kennedy describing the emails as “clearly disturbing”.

PwC finishes investigation into tax avoidance scandal

PwC Australia has wrapped up its investigations into the handling the confidential Treasury information and other “past failures”, it said on Monday.

It found there were a number of “specific examples” where professional standards had been breached regarding the misuse of confidential information and other ATO-related matters.

Additionally, the firm found there was a lack of leadership and governance to adequately address the matters, with such behaviours breaching PwC’s standards.

Tom Seymour have been given notice of PwC Australia’s findings against him. Picture: Floss Adams.

In light of this, eight partners have exited or are in the process of being removed from the partnership.

PwC said that Peter Konidaris and Eddy Moussa had exited the partnership because “their actions failed to meet their professional responsibilities”. For similar reasons, Richard Gregg has been given notice that a process has started under the Partnership Agreement to remove him from the partnership.

Also, Pete Calleja and Sean Gregory have exited the PwC partnership. PwC said it was taking action against the pair as a result of their “failure to adequately exercise their expected leadership or governance responsibilities to prevent these actions or to address the deficiencies in culture at the firm or hold others accountable for their behaviours”.

Additionally, Peter van Dongen, Wayne Plummer and former CEO Tom Seymour have been given notice of PwC Australia’s findings against them. A process has started under the Partnership Agreement to remove them from the partnership.

Mr Seymour’s recommended exit is earlier than his previously announced retirement date.

PwC is undergoing changes to save face following the tax avoidance scandal. Picture: NCA NewsWire / Damian Shaw

Acting CEO Kristin Stubbins said it was obvious the conduct of a number of partners “fell short” of what was expected of them.

“They are now being held accountable for their misconduct,” she said.

“While we cannot change the past, we can control our actions today and in the future. Moving forward, the PwC Australia management team will continue to take all appropriate steps to improve the firm’s culture and standards.”

PwC sells business for $1

The exits follow last month’s announcement that Singapore CEO Kevin Burrowes will step in as the firm’s next CEO for the Australia branch.

Mr Burrowes will be parachuted into the CEO role replacing Ms Stubbins who has been in the role for the last seven weeks following Tom Seymour’s departure in early May.

Kevin Burrowes is the incoming PwC Australia CEO. Picture: Supplied

The new CEO plans to relocate from Singapore to Sydney to become a PwC Australia partner but he is yet to complete Australia’s immigration process.

In addition to the leadership change, PwC confirmed last month that all of its federal and state government business would be divested exclusively to Allegro Funds for a mere $1.

The new entity has been referred to as project “Bell”. It will become a company and will therefore be subject to corporate governance obligations and oversight from ASIC via the Corporations Act.

PwC Australia operates on a partnership model, meaning it is not incorporated and is not subject to corporate governance oversight via the Corporations Act, instead it has voluntarily adopted a code of conduct.

The deal involves about 130 partners and 2000 staff. The government consulting operations arm of PwC was responsible for about 20 per cent of the firm’s revenue in the 2023 financial year.

The firms are positioned to sign a binding agreement by the end of this month.

Treasury said in June that it had referred the matter to the Australian Federal Police “to consider commencement of a criminal investigation”.

– With NCA Newswire

Originally published as Eight partners to exit PwC partnership following tax avoidance scandal