PwC reveals second incident after tax avoidance matter rocks firm

Consultancy business PwC Australia has revealed an incident with a partner involving a conflict of interest.

Consultancy firm PwC Australia has revealed an incident involving a conflict of interest has taken place within the past five years.

The firm has this year been rocked by allegations its former head of international tax Peter Collins received confidential information — and proceeded to share it with colleagues.

It’s alleged that PwC used that confidential information to market tax avoidance schemes around the world.

The matter has sparked a Senate inquiry and resulted in the firm divesting all its federal and state government businesses for a mere $1.

Greens Senator Barbara Pocock asked the firm: “How many disciplinary actions have been taken in relation to conflicts of interest and/or the misuse of government information in the past five years? Past one year?”

In response PwC told the Finance and Public Administration References Committee: “Based on our enquiries, we are aware that the firm has taken action in relation to two matters involving conflicts of interest and/or the misuse of government information in the past five years, including the Tax Practitioners Board matter in which disciplinary action was taken this year. The other matter occurred in 2018.”

The new information is that a separate incident occurred in 2018.

A spokesman for PwC told news.com.au: “There is no second misuse of information breach. PwC, like other firms, was asked about disciplinary actions and PwC confirmed it had taken discipline against a partner over an internal process oversight where the partner did not obtain approval for an exclusivity undertaking in an engagement.”

Senator Barbara Pocock provided questions for PwC to respond to on notice. Picture: NCA NewsWire / Martin Ollman

PwC Australia is battling to protect its lucrative business and last month announced Kevin Burrowes would be flown in from Singapore to take over as CEO.

In early June, PwC Australia announced nine of its partners would take immediate leave.

Last week the outgoing CEO of PwC Australia Kristin Stubbins announced eight partners had been sacked from the consultancy firm, including chief executive Tom Seymour – who announced he would step down from the top job after the matter was made public

PwC launched an internal investigation into the tax avoidance matter and said the probe 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.

In light of this, it said eight partners exited or were in the process of being removed from the partnership.

PwC has announced a second incident took place. Picture: NCA NewsWire / Damian Shaw

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 had given notice that a process had started under the partnership agreement to remove him.

PwC Acting CEO Kristin Stubbins announced the firm would cut ties with eight partners last week. Picture: NCA NewsWire / David Swift

Also, Pete Calleja and Sean Gregory 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 were given notice of PwC Australia’s findings against them. A process had started under the partnership agreement to remove them.

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

Meanwhile, PwC rival Deloitte revealed it had disciplined a staff member in the last year for misuse of government information, The Australian reports.

The firm has not revealed the nature of the breach due to confidentiality issues with its client.

There were 10 incidents of misuse of confidential or proprietary information in the last financial year, Deloitte said.