PwC suspends 9 partners over Australian tax scandal

Featured Sponsor

Store	Link	Sample Product
UK Artful Impressions	Premiere Etsy Store

PwC has suspended nine partners and pledged to publish the findings of an internal review later this year as it works to contain a tax leak scandal engulfing its Australian operations.

The company came under intense public scrutiny after the release of emails showing it had used inside information about government tax law changes to acquire new business.

The move to suspend nine partners, including members of its executive and governance councils, is the latest escalation of a scandal that erupted in February. PWC extension he said he would close the work he does with the federal government in Australia to minimize conflicts of interest.

PwC staff have been told to “go on leave effective immediately. . . pending the outcome of our investigation,” according to the company.

PwC’s former international tax chief Peter Collins was this year banned by the Australian Tax Watchdog for sharing inside information with his colleagues about the government’s plans to change tax avoidance laws. The emails showed how PwC had used confidential information to acquire new business.

The release of redacted emails between Collins and other PwC partners, both in Australia and internationally, created a global crisis for the company. Tom Seymour, head of PwC Australia, he resigned this monthwhile the Australian Treasury has referred the situation to the federal police to consider a criminal investigation.

Kristin Stubbins, interim managing director of PwC Australia, released an open letter on Monday apologizing. “I want to apologize on behalf of PwC Australia. For sharing confidential information about government tax policy and for betraying the trust placed in us,” Stubbins said. “No amount of words can make it right.”

Stubbins said the leak highlighted a “failure of leadership and governance” and what he called a “culture of aggressive marketing in our tax business” in Australia.

Tracey Kennair, chair of the board of PwC Australia, and Paddy Carney, chair of its risk committee, have resigned from their roles.

Stubbins said the company will publish the findings of an internal review conducted by former telecommunications executive Ziggy Switkowski in late September.

PwC has not released the names of partners who have been included in the emails or customers who have potentially benefited from the advice it has tailored based on the confidential information. A senator tried to force names in a hearing last week but was unsuccessful.

Deborah O’Neill, a ruling Labor Party senator who triggered the release of the redacted emails, said the scandal raised questions about the entire consultancy industry. “The contagion is real,” O’Neill said. “Those people who put money above integrity had a field day.”

Prime Minister Anthony Albanese told 2SM radio on Monday that the scandal was a “terrible indictment” of the industry and that any government should consider the “ethical considerations that follow from this behavior by PwC” .

Stubbins described the scandal as “personally and professionally devastating”. However, he has tried to provide some distance to his clients.

“Our customers have not been involved in any wrongdoing and no confidential information has been used to enable customers to pay less tax,” he said.

Collins has not returned requests for comment since the scandal emerged.