ASIC won’t revoke PwC’s financial services licence because tax info was shared by an ‘individual’

Regulator ASIC is ‘not in a position’ to revoke PwC’s financial services licence over individual actions, its deputy chair has told a Senate hearing.

The corporate regulator has decided against suspending the licence of PwC’s securities arm because it considers those who leaked the government’s confidential tax information had acted “individually”.

Speaking at a parliamentary hearing on Tuesday, Australian Securities and Investments Commission deputy chair Sarah Court said ASIC had considered whether to suspend or revoke PwC’s corporate licence but would not do so.

“That is an option,” she said. “However our assessment is that we are not able to do that in relation to this conduct.”

“This is conduct, so far as we are currently aware, of one or more persons acting individually.

ASIC deputy chair Sara Court.

PwC’s former international tax leader, Peter Collins.

“This is not conduct that was undertaken in the name of the company that is the holder of the Australian financial services licence.”

ASIC does not regulate partnerships but governs those that hold financial services licences.

The regulator said it was investigating whether to ban former PwC head of international tax Peter Collins from holding a licence to provide financial services in the future.

“It’s clearly not a pressing issue at the moment in that Mr Collins is not authorised to do that,” Ms Court said.

The Tax Practitioners Board banned Mr Collins as a result of him sharing sensitive and confidential information which he gained from advising the Australian Taxation Office, which the firm then monetised.

The scandal has hurt PwC Australia’s reputation to such an extent that global headquarters this week intervened to install a new head for the business from Singapore, to replace acting chief executive Kristin Stubbins.

Ms Stubbins, who has been in the role for just six weeks, apologised at a public inquiry on Monday.

Kristin Stubbins has been replaced as the acting CEO of PwC Australia. Picture: Jane Dempster

The firm also decided to offload its government consulting unit to a private equity firm after the government banned the firm from any future work.

Senator Deborah O’Neill was not satisfied with the regulator’s response regarding its decision to not suspend the corporate licence.

“Here’s a PwC partner, his business card says PwC, he’s embedded in the tax division … he’s operating under a PricewaterhouseCoopers Securities-tagged financial licence, but it’s only about Mr Peter John Collins, not PricewaterhouseCoopers – it just doesn’t ring true,” she said.

But Ms Court said Mr Collins’ conduct was “as a partner of PwC” – falling outside of ASIC’s jurisdiction – and not “operating under his authorised representative status at the time he was engaging in this misconduct.

“(The conduct) is not the provision of financial advice or financial services and it was not sanctioned, done, or on the instruction of anyone involved (with) an Australian Financial Services Licence,” Mr Court said.

“There is a difference between the licence-holder and the PwC partnership.”

Mr Collins had been an authorised representative of PwC’s corporate entity’s licence from 2004 and 2006, and then again from December 2013 through to October 2022, Ms Court said.

“It’s pretty hard to see where you take one PwC hat and put on another,” Senator O’Neill responded.

“It looks like it’s all very enmeshed, and I think therein lies the risk.”

PwC moved on Sunday to bring in fresh leadership at the top, with the appointment of Singapore based PwC veteran, Kevin Burrowes. That along with the decision to spin off its profitable government consulting business to private equity firm Allegro was aimed at stemming the tide of criticism of the organisation in the wake of the damaging tax leak scandal.

The move will see will sew PwC Australia give up some $600m in annual revenues from its government consulting practice, representing some 20 per cent of its $3bn in revenues.