- By Annabelle Liang
- business reporter
Jun 26, 2023 at 4:41 am BST
Updated 1 hour ago
PwC Australia announces it will sell its government business for A$1 ($0.70; £0.50) following a scandal surrounding the abuse of confidential government tax plans.
The accounting giant has also announced the appointment of a new chief executive officer in the country.
In January, it emerged that a former PwC Australia partner leaked the classified information.
The ex-partner, who advised the Australian government, had shared draft corporate tax avoidance laws with colleagues, who used them to target potential clients. The leaks happened between 2014 and 2017.
The company said no confidential information was used to help customers pay less tax.
However, politicians and officials have called for PwC Australia to be banned from government contracts until PwC Australia has responded satisfactorily to the scandal.
Earlier this month, PwC Australia said it had identified 76 current and former partners linked to the scandal and turned their names over to Australian lawmakers.
On Monday, acting chief executive of PwC Australia Kristin Stubbins said at a parliamentary inquiry that staff found to have acted inappropriately face “serious” consequences.
“We have not met the standards that we have set for ourselves as an organization and I apologize on behalf of our company,” she said.
PwC Australia on Sunday appointed Kevin Burrowes as its new CEO. Previously, he was the global account and industry leader for PwC Network.
“He will work with his colleagues and the management team to restore stakeholder confidence in PwC Australia,” said Justin Carroll, Chairman of the Board of PwC Australia.
The company also announced it would sell its Australian federal and state government businesses to private equity firm Allegro Funds, with a goal of reaching a binding agreement on the deal by the end of next month.
The sale will create two independent businesses without “disrupting the provision of vital services to public sector clients,” PwC Australia said.
PwC Australia’s government business employs around 1,750 people and generates around 20% of annual revenue.
In May, Tom Seymour, the former chief executive of PwC Australia, resigned after admitting he was one of at least 67 recipients of the sensitive information at the heart of the scandal.
Later that month, the company furloughed nine partners and renewed its board.
Australia’s Treasurer Jim Chalmers called the revelations a “shocking breach of trust”.
According to official information, the Australian government has committed to contracts with PwC worth A$ 255 million for the current financial year.
Since the scandal first broke, major pension funds including AustralianSuper, as well as the country’s central bank, have said they would not sign new deals with PwC.