PwC preparing report on ‘accountability’ as investigation into tax leak continues

PwC Australia staff will be interviewed by lawyers as the firm seeks to clarify who was exposed to leaks of confidential tax information.

PwC is facing multiple probes into its use of confidential tax information. Picture: NCA NewsWire / Andrew Henshaw

PwC Australia has brought in a team of external lawyers to assess the potential implications for at least 63 current and former staff and partners who may have received confidential information, after the firm’s former head of international tax leaked government briefings.

Sources have indicated to The Australian that PwC is now calling in current staff for interviews with legal advisers to find out the level of their knowledge and involvement with breaches of confidence that now see the firm facing public fury.

Law firm King Wood Mallesons has been touted internally as the firm running the interviews.

The findings of the interviews are set to be handed to PwC management so the firm can apply “accountability” to the staff members involved in the breaches of confidentiality.

PwC partners expect the interviews to play out over the coming three weeks, with the firm’s acting chief executive Kristin Stubbins telling a meeting of partners on Friday the legal review was aimed at providing accountability within the professional services giant and comes separate to a broader review into the firm being spearheaded by corporate veteran Ziggy Switkowski.

A PwC spokesman declined to answer questions but noted the firm’s investigation “remains underway”.

“We have, and will continue to take appropriate action against anyone who is found to have breached confidentiality or failed in their leadership duties,” he said.

PwC has been subject to weeks of growing public outcry over revelations the firm misused confidential information gained from government briefings, aimed at reforming Australia’s tax laws.

PwC’s former head of international tax, Peter Collins, was deregistered for two years by the Tax Practitioners Board after finding he breached multiple confidentiality agreements signed with Treasury.

The TPB found Mr Collins “failed to act with integrity, as required under his professional, ethical, and legal obligations”.

But the ban, announced in January, initially saw PwC seek to argue the breaches were of a limited scope in the firm.

Peter Collins, former international tax leader for PwC Australia.

PwC’s former chief executive Tom Seymour, who resigned from the role amid outcry over his involvement in the scheme, said the firm faced a “perception problem” in March.

However, 144 pages of emails tabled by parliament in May revealed the scandal was spread throughout PwC and saw several senior figures in the firm’s UK and American knowingly dealing with the confidential information from Mr Collins to construct schemes to sell to clients.

PwC has been assembling a list of partners and staff in the firm it believes had knowledge of the confidentiality breaches or participated in the sharing of information.

The firm has assembled a list of at least 63 names which it handed to a parliamentary committee that has declined to publish the document amid fear it may provide legal cover to PwC staff in the face of two new probes into the firm.

PwC has refused to name current partners involved in the leaks, but Ms Stubbins said former partners Michael Bersten, Peter Collins, Neil Fuller and Paul McNab were involved in the scheme.

Mr Bersten and Mr McNab have both denied the allegations.

The firm has also directed nine partners to go on leave pending the outcome of its investigations.

Treasury referred Mr Collins and PwC to the Australian Federal Police in May, while the TPB has confirmed it is preparing to commence further formal investigations into PwC tax partners and staff involved in the scheme.

This could see the TPB take action against partners involved in the scheme or those with knowledge of the cover up.

PwC is also running two further investigations into the conduct, in addition to the internal legal probe.

The firm’s international operations have commissioned law firm Linklaters to investigate the potential links to PwC’s global operations.

Dr Switkowski is also probing PwC in a review that will scrutinise the firm’s leaks of tax information as well as a broader cultural probe of the partnership.

Separately, PwC confirmed on Monday it has been caught up in the hack of third party transfer platform MOVEit, but issued assurances that the impact was limited and its own systems had not been compromised.

The firm said it used the MOVEit software for a limited number of client engagements, but stopped using the platform “and started our own investigation” after becoming aware of the hack.

“Our investigation has shown that PwC’s own IT network has not been compromised and that MOVEit’s vulnerability had a limited impact on PwC,” a spokesman said.

“We have reached out to the small number of clients whose files were impacted to discuss the incident.”