Daily Management Review

After The Tax Leak Controversy, PwC Australia Sold A Business Unit For 50 Pence.


After The Tax Leak Controversy, PwC Australia Sold A Business Unit For 50 Pence.
Following a scandal involving the misappropriation of secret government tax plans, PwC Australia has announced that it will sell its government business for A$1 (50p). The country's new top executive has also been named, according to the accounting behemoth.
The decision will enable the company to "move forward with predictability and focus," according to a statement from PwC Australia. It was discovered in January that the classified information had been leaked by a former PwC Australia partner.
Drafts of corporate tax evasion regulations were distributed by the ex-partner, who was assisting the Australian government, to colleagues who used them to pitch prospective customers. The leaks happened in the years 2014 through 2017.
According to the business, no private information was used to assist clients in paying less tax.
Politicians and government representatives have demanded, however, that PwC Australia not be permitted to receive government contracts until it has adequately addressed the situation.
PwC Australia claimed earlier this month that it had found 76 current and former partners connected to the scam and had sent the names of these individuals to Australian MPs.
Acting PwC Australia CEO Kristin Stubbins said on Monday that any staff members found to have violated company policy will suffer "severe" repercussions.
"We have failed the standards we set for ourselves as an organisation, and I apologise on behalf of our firm," she said.
On Sunday, Kevin Burrowes was named the new CEO of PwC Australia. He formerly served as the director of global clients and industries for PwC Network.
"He will work with his colleagues and management team to re-earn trust with PwC Australia's stakeholders," said Justin Carroll, the chair of PwC Australia's governance board.
The corporation also announced that it would sell its federal and state government operations in Australia to the private equity firm Allegro Funds, with a view to finalising the sale by the end of the following month.
Without any "disruption in vital services to public sector clients," the sale will result in the creation of two independent firms, according to PwC Australia.
About 1,750 people work for PwC Australia's government practise, which contributes about 20% of the company's yearly income.
Former PwC Australia CEO Tom Seymour resigned in May after admitting to being one of at least 67 recipients of the sensitive material at the crux of the affair.
Later that month, the business reorganised its governing board and placed nine partners on leave.
The disclosures were referred to as a "shocking breach of trust" by Australia's Treasurer Jim Chalmers.
According to official figures, the Australian government has contracts with PwC totaling A$255 million for the current fiscal year.
Major pension funds, including AustralianSuper, and the nation's central bank have declared they won't sign any new contracts with PwC since the controversy first surfaced.