Eight more PwC partners leave business in ‘tardy response’ to tax scandal

PwC faces a political storm despite dumping eight partners, promising a new era of openness and accountability and releasing a humiliating statement of condemnation.

Former PwC chief executive Tom Seymour. Picture: Lyndon Mechielsen

PwC Australia’s shedding of eight more partners enveloped in the tax secrets scandal has been blasted as being part of a “tardy” and “begrudging” response as the firm faces growing demands to reveal all on its operations.

Labor and the Greens have demanded greater public transparency at PwC after failing to explain fully on Monday how the scandal unfolded or what its partners had done.

PwC is also at risk of a possible federal corruption investigation despite the company removing former CEO Tom Seymour early and former chairman Peter van Dongen among a long list of once powerful partners on nation-leading remuneration packages.

PwC did not release the full list of 63 names who received confidential tax information because some of the people were low-level workers or didn’t act on it, The Australian understands. But it released a humiliating statement that detailed the axing of the PwC eight.

Federal Labor senator Deborah O’Neill accused the firm of being in damage control and operating under the cover of secrecy, depriving the public of the full story of how confidential tax information was used to bolster the company’s bottom line.

“Many questions remain unanswered, and there is still no indication from PwC that the broader professional failures, that should have been reported to supervisory entities by PwC, have in fact been reported,” said Senator O’Neill, who chairs the Joint Parliamentary Committee on Corporations and Financial Services. “This is not a line-in-the-sand moment for PwC. It is a begrudging and tardy response to gross ethical and professional failures.’’

Greens senator Barbara Pocock, who has referred the matter to the new federal anti-corruption body, said PwC had failed to take responsibility for what had happened, adding the “full nest” of relationships had not been laid bare.

The Weekend Australian revealed that Mr Seymour had removed himself as a director of an education company PwC had invested heavily in, right as the tax scandal was about to become public. In January, tax ­expert Peter Collins abruptly left the company amid an unprecedented tax scandal.

Mr Seymour was outed in May as one of dozens of partners who received emails about confidential information obtained by Mr Collins. The PwC statement does not specify what the partners have done wrong but notes they either mishandled Treasury information or had failed in ethical or leadership responsibilities.

Mr Collins was asked 10 years ago to help frame laws to get large foreign companies to meet tax ­obligations in Australia. Mr Collins signed a series of confidentiality agreements but he ignored the legal restrictions, according to the Tax Practitioners Board, which found that he shared that information within PwC, handing the company a ­financial advantage by being able to act early on the information.

“As a result of the investigation’s findings, eight partners have exited or are in the process of being removed from the partnership,’’ acting chief executive Kristin Stubbins said in the statement on Monday. “The investigation identified a number of specific examples where professional standards were breached with respect to misuse of confidential information or other matters reviewed by the ATO.

“Furthermore, the investigation identified a failure of leadership and governance to adequately address the matters, either at the time or whilst the matters were under investigation by the TPB or ATO. This enabled poor behaviours to persist with no accountability.’’

The statement made clear that Mr Seymour would leave the ­business earlier than previously forecast, Mr van Dongen was going, and former government, health and infrastructure partner Peter Konidaris had gone. Tax partner Eddy Moussa had also ­already left PwC and other partners who were either going or had gone were Richard Gregg, Pete Calleja, Sean Gregory and Wayne Plummer.

“These departures are in addition to the four former partners: Michael Bersten, Peter Collins, Neil Fuller, and Paul McNab, who were previously named as being involved in confidentiality breaches,’’ the company statement said.