EY orders associate partner to dump stake in a tech firm over potential conflict of interest

Consulting giant EY Oceania ordered an associate partner to dump a 10 per cent stake in a Sydney tech company, due to concerns over his disclosure of outside investments.

Consulting giant EY Oceania ordered then associate partner David du Plessis to divest himself of shares in Prime Smart Systems.

A deal over a tech company gone awry has exposed how one of Australia’s biggest consulting and audit firms handles conflicts of interest, amid concerns staff are operating side businesses under the cover of the brand.

Consulting giant EY Oceania ordered an associate partner to dump a 10 per cent stake in a Sydney tech company, amid concerns his side business had strayed into the territory of the professional services heavyweight.

Former EY associate partner David du Plessis was forced to explain to the firm how a company associated with his wife came to own 10 per cent of Sydney-based laser vision system operator Prime Smart Systems in August, after a complaint was raised against the consultant.

Mr du Plessis had told EY his wife snapped up the stake in the tech company after doing her own work with the business, but figures associated with the deal have told The Weekend Australian the consultant was handed the 10 per cent ownership after introducing Prime Smart Systems to private equity firm GPRS Capital in a debt rescue deal.

Sources close to the deal said Kim du Plessis, Mr du Plessis’ wife, had played no role at Prime Smart Systems, yet she was awarded a 10 per cent stake in the company through a business she controlled.

Former EY associate partner David du Plessis.

Melbourne-based GPRS Capital snapped up 40 per cent of Prime Smart Systems after Mr du Plessis first raised the business with the investment house early this year.

Mr du Plessis later offloaded Ms du Plessis’ holdings to GPRS Capital, after being questioned about the stake by EY in August.

Sources told The Australian they were concerned over Mr du Plessis’ actions during the deal, noting he had sent emails from an account associated with GPRS Capital and not EY.

Mr du Plessis confirmed he had sent emails from a GPRS Capital account, telling The Weekend Australian he had since left EY and was “about to enter into alternative employment on a full-time basis”.

“While I have a referral network, which includes GPRS, I do not have a formal relationship with them and have actually requested the partners who are copied on this note to terminate the email,” he said.

“Prior to departing the firm, I did indeed disclose the referral work I did with GPRS to EY and copy Richard Williams (EY tax partner) on this note, for ease of reference and to confirm that this was indeed the case.”

A GPRS spokesperson said Mr du Plessis was one of the firm’s “broad network of business contacts”, but noted he had “never held any position with GPRS, as employee, contractor, shareholder or officeholder”.

“GPRS has had conversations with David about business opportunities. GPRS’s shareholding in PSS is the only deal arising from an introduction by David,” the spokesperson said.

“We were advised this involved David acting in his personal capacity, not in connection or conflict with his role at EY.”

The spokesperson said the firm’s partners had “never met or spoken to Kim du Plessis”, despite her being handed a 10 per cent stake in the business.

An EY spokesman said Mr du Plessis had not disclosed any roles outside the firm during his employment, but had disclosed “a range of investment holdings into GMS, our Global Monitoring System, in accordance with our policies” including an association with GPRS.

EY said it monitored all outside investments and director roles by partners through its monitoring systems.

A spokesman said all outside roles … requires pre-approval of risk management, and partners are not allowed to conduct business which could conflict or compete with EY”.