The Australian branch of the accounting and consulting firm PwC is divesting its embattled government advisory division. PwC Australia intends to sell these operations to investment firm Allegro for the symbolic amount of 1 Australian dollar.
This move follows a national scandal involving a former partner of PwC who assisted the Australian government in combating tax evasion. However, confidential information from those discussions was simultaneously used to provide advice to multinational corporations.
Colleagues of that partner utilized this information to secure new contracts with companies, potentially enabling them to circumvent new tax measures. The leakage of information could prove costly for PwC as major government clients are currently reconsidering their relationship with the firm.
By separating the government advisory unit, PwC hopes to regain trust from ministries and agencies that are currently reluctant to award new contracts to the firm.
PwC Netherlands recently confirmed that it is investigating the involvement of its Dutch branch in the scandal. Employees in the Netherlands are alleged to have assisted in acquiring new clients using the confidential information.
PwC operates through a global network of national offices that largely operate autonomously. The international organization is also taking action regarding the leadership of the Australian office. The company has appointed Kevin Burrowes, previously from PwC’s global board, as the CEO of PwC Australia. Under his supervision, the office is expected to improve its governance style.
Bob Moritz, the global chairman of PwC, apologized for the scandal in Australia. He stated,
“Under the previous leadership, PwC Australia failed to adhere to the code of conduct of our network. We deeply regret this and extend our apologies to our clients, other stakeholders, and our own people.”
