PwC has suspended nine partners and will come out with the results of internal investigations later this year, following the Australian scandal surrounding the leaking of information by a tax adviser.
So reports the Financial Times, which says PwC is trying to limit the damage from an issue that now extends beyond Australia.
The move to suspend nine partners, including directors of the Australian organisation, is the latest development in the scandal, which first became public in February and only later came out widely. The nine partners have been told that they have been placed on leave with immediate effect, pending the outcome of the internal investigation.
PwC Australia board chairman Tom Seymour resigned earlier this month over the issue. The Australian Department of Finance has referred the matter to the federal police for possible criminal investigation.
The Australian PwC organisation has come under heavy fire after releasing emails showing that confidential information about upcoming tax legislation had been used to alert existing clients and bring in new ones.
PwC partner Peter-John Collins, who previously headed the Australian international tax practice, was involved in the Australian government’s development of new tax laws in the past. He was already sharing his knowledge of these while developing them with fellow tax lawyers, who thereby helped clients get around the new rules.
The sharing of that information was not limited to Australia, but also reached PwC tax lawyers in the US, UK, Ireland, Singapore and the Netherlands. The Dutch PwC organisation is investigating possible involvement in the case.
Kristin Stubbins, acting ceo of PwC Australia, recently published an open letter apologising on behalf of PwC Australia for sharing confidential information and breaching trust. “No amount of words can make up for that,” she said.
Stubbins speaks of failed leadership and a “culture of aggressive marketing” in the tax practice. Even when critical comments about this were made in a review back in 2021, PwC Australia did “too little too late”.
According to her, PwC will present the findings of the internal investigation at the end of September. Ahead of that, Stubbins argues that no confidential information would have been used to give clients tax advantages.
Meanwhile, questions are being raised in Australian politics about the integrity of the consulting industry as a whole. Australian Prime Minister Anthony Albanese, in an interview, spoke of a “terrible indictment” of the sector and argued that any government must consider the “ethical considerations arising from this PwC conduct”.
