PwC faces recall after parliamentary appearance over international links concerns

Key members of a parliamentary committee examining the use of consultants say PwC has failed to satisfy their demand for answers over the tax scandal.

As the dust settles on another bruising round of parliamentary jousting, it’s increasingly clear PwC Australia’s attempts to sheet home the blame for the tax scandal lingering around the firm has not mollified the firm’s critics.

All three members of the Senate’s Finance and Public Administration Committee, which has prosecuted the parliamentary inquisition of PwC over the firm’s misuse of confidential tax information, warn they’re not done yet.

The committee on Thursday heard PwC attempt to paint the firm’s breaches as fairly limited and largely linked to the sharing of the date on which the Multinational Anti Avoidance Laws were to begin, in 2016.

PwC boss Kevin Burrowes sought to link the failings to the former management and staff – many of whom were no longer with the business.

However, Mr Burrowes admitted to the committee he had not been shown a copy of a review by law firm Linklaters which found six individuals had received confidential information and “should have raised questions”. The committee has responded PwC must come clean on who knew what.

Labor Senator Deborah O’Neill said she was “very underwhelmed” by Mr Burrowes’ evidence, saying that “if that’s what they’re relying on to close our interest in the matter, then it’s simply whet my appetite”.

Mr Burrowes’ appearance before the committee comes months after he took on the top job at PwC and marked only the second time the audit and consulting giant has been forced to explain the tax scandal in public.

The firm has tried to manage the media exposure relating to the tax scandal, issuing curt statements, refusing to respond to questions, and issued defamation concerns notices to publications.

The moods of PwC chief executive Kevinn Burrowes at the Senate inquiry

PwC published the landmark report into the firm’s culture and governance, prepared by corporate veteran Ziggy Switkowski, under the cover of several other major news events – such as the high-profile appearance of Qantas executives before a Senate committee and on the same day PwC rival KPMG Australia’s representatives appeared before the committee.

PwC global chair Bob Moritz flew to Australia to speak with the firm’s largest clients on the back of the Switkowski report, but left the country before he could be called to appear before the Senate committee.

Senator O’Neill said Mr Moritz’s visit “looked like he was here to do a PR job, not to come and tell the truth”.

Mr Moritz, who chaired PwC’s American operation when the firm used the confidential Australian tax information under “Project North America”, has been key to a number of decisions taken throughout the scandal, including pushing the firm to tip out former chief executive Tom Seymour.

PwC has been desperately trying to hold on to its largest clients in Australia as the scandal unfolded. Commonwealth Bank chair Paul O’Malley revealed he had spoken with Mr Burrowes twice in recent weeks as the audit and consulting giant sought to mollify any concerns at Australia’s biggest lender.

Greens Senator Barbara Pocock said responses to the hearing on Thursday showed the willingness of PwC’s international leadership to throw the Australian operations “under the bus”.

“We have nothing except the assurance of PwC itself,” she said. “We need to see the nature of the analysis which allows them to infer the complete innocence of all global partners.”

Mr Burrowes, who was unavailable for an interview, told PwC partners in an email that the appearance on Thursday was “an opportunity to contribute to what will ultimately drive trust and confidence in the sector”.

“We answered questions about what went wrong and what we are doing to ensure change and a reset for the future,” he wrote.

Mr Burrowes told staff PwC was now “looking ahead” and that the audit and consulting giant was preparing for a business-wide meeting next week.

PwC is preparing for the separation of its former government consulting business, which it sold in a $1 deal to Allegro Funds. The spin-off, Scyne Advisory, is awaiting approval from the Foreign Investment Review Board to formalise the split.

The investigation by the Australian Federal Police and the Tax Practitioners Board into the tax leaks hangs over the head of PwC’s leadership.

The Department of Finance has handed over a number of documents to the AFP, which opened a file into the tax leaks after Treasury secretary Steven Kennedy referred the matter in May.

The Tax Practitioners Board is working through its own investigation and PwC faces orders to produce documents relating to its various legal reviews into the misuse of confidential information.

Finance and public administration committee chair Senator Richard Colbeck said he was seeking to raise the issue of the tax leaks scandal with colleagues in the US and the UK, because emails revealed in parliament showed the two countries had been key to the tax schemes created by PwC.

Senator Colbeck said that, given a number of reviews had shown PwC was willing to misuse confidential information in Australia, it was likely the firm had engaged in similar activities overseas.

“We’re dealing with a pattern of behaviour and a propensity to behave in a certain way,” he said. “PwC are trying to limit the damage to Australia.”

The parliamentary inquiry returns in November, and the expectation is PwC will be recalled.

Originally published as PwC faces recall after parliamentary appearance over international links concerns