This was published 7 months ago
Senate committee lashes PwC over tax scandal, alleges cover-up
By Colin Kruger
The Senate committee that uncovered the PwC tax scandal has accused the consulting firm’s leadership of failing to co-operate with the inquiry in an attempt to minimise damage to its reputation and questioned whether the problems which caused the scandal are being addressed.
A second interim report by the Senate inquiry into the consulting industry released on Wednesday says PwC has continued to frustrate its investigations, and was scathing about the evidence provided by former chief executive Luke Sayers, now the president of AFL club Carlton.
The Senate committee questioned the credibility of the evidence given by former PwC boss Luke Sayers.Credit: Alex Ellinghausen
“The committee has found it impossible to reconcile the different versions and recollections of events provided by the witnesses. The committee is concerned about the truthfulness of some of the evidence it has received and is left questioning the credibility of Mr Sayers’ evidence,” said the report, titled PwC: The Cover-up Worsens the Crime.
The committee also criticised the continuing use of legal professional privilege to protect PwC’s global business, which was involved in using the confidential tax information via Project North America.
“PwC has attempted to reassure the committee that it has already taken the appropriate actions in relation to Project North America. And yet, PwC continues to use legal professional privilege as a reason not to provide the Linklaters report (into PwC Global’s role in the scandal) to the committee,” it said.
“PwC’s continued refusal to provide the Linklaters report is symptomatic of its problematic engagement with the committee.”
While current PwC management have recognised the need for change to the firm’s culture, leadership and governance, the committee questioned its progress on that front.
“The committee is not convinced on the evidence provided to it at this point that such substantive change is forthcoming,” it said.
The tax scandal first came to light more than a year ago, but the scale of it was not revealed until May last year when the Senate committee released a cache of emails revealing the brazen attempt to use confidential government tax plans to cultivate fresh business from notorious corporate tax avoiders.
Senator Deborah O’Neill said the latest report highlighted the ongoing failures of leadership and accountability by PwC Australia chief executive Kevin Burrowes and global chairman Bob Moritz, for their failure to come clean with the Senate committee about important matters.
Senator Deborah O’Neill says the senate report highlights Senator Deborah O’Neill said the latest report highlights the ongoing failures of leadership at PwC. Credit: Alex Ellinghausen
Those failures included clarifying details of the specific nature of interventions by PwC Global in the Australian firm, and the Linklaters legal report into the misconduct of international partners.
“It remains my goal to ensure that PwC’s desire to minimise its losses does not come at the cost of full transparency with respect to their wrongdoing,” O’Neill said in a warning that could inflict further damage on PwC’s dwindling corporate business.
“Unless PwC shows this commitment to accountability and reform, the firm’s government and corporate clients cannot be confident that the firm can be considered a trusted entity.”
Greens senator Barbara Pocock emphasised the lack of consequences for former boss Luke Sayers.
Sayers has claimed ignorance of the transgressions that were happening right under his nose “which our committee finds simply implausible”, she said.
PwC Australia highlighted its progress in a reply to the report.
“We have taken considerable steps to transform our firm and rebuild trust, making significant progress on our comprehensive transformation program and implementation of our Commitments to Change.”
“We would highlight again that meaningful change takes time and that we will continue to co-operate with the Senate and regulators in an effort to enact transformative, structural change to our firm and industry.”
Sayers has been approached for comment.
The Senate committee’s final report is due to be released at the end of May.