“PwC Australia” has decided to sell its government business for a nominal sum of A$1 following a controversy involving the unauthorised use of confidential government tax information. The accounting firm has also appointed a new chief executive for its operations in the country. The sale of the government business will enable “PwC Australia” to proceed with stability and concentration, according to the company’s statement.
Earlier this year, it was revealed that a former partner of “PwC Australia” had leaked classified information. The Australian government was given advice by this ex-partner, who also shared draughts of corporate tax evasion rules with colleagues, who then used the material to market their services to future clients. Between 2014 and 2017, there were leaks. PwC Australia has insisted that no secret information was used to help clients lower their tax obligations.
Nevertheless, a number of elected officials and lawmakers have demanded that PwC Australia be prohibited from getting government contracts until it appropriately tackles the situation. In retaliation, “PwC Australia” recently gave 76 current and former partners connected to the controversy’s names to Australian MPs.
In an appearance before a parliamentary inquiry, PwC Australia’s acting chief executive, Kristin Stubbins, stated that employees found to have engaged in improper conduct would face severe consequences. To further address the situation, PwC Australia has appointed Kevin Burrowes as its new chief executive. Burrowes previously served as the global client and industry leader for PwC Network.
As part of its remedial measures, PwC Australia intends to sell its Australian federal and state government business to Allegro Funds, a private equity firm. The company aims to finalise a binding agreement for the deal by the end of the following month. PwC Australia’s government business comprises approximately 1,750 employees and contributes about 20% to its annual revenue.
The fallout from the scandal has had significant repercussions for PwC Australia. Major pension funds such as “AustralianSuper” and the country’s central bank have announced their decision not to enter into any new contracts with the firm.
According to official records, PwC holds contracts worth A$255 million from the Australian government for the current fiscal year. The future of these contracts, however, is still unclear in light of current events.