PwC Australia: Accountant splits business after tax evasion scandal

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  • By Annabelle Liang
  • Business reporter

PwC Australia has said it will sell its government business for A$1(0.70; £0.50) after uncovering the abuse of secret government tax schemes.

The accounting giant has announced the appointment of a new CEO.

In January, it emerged that a former PwC Australia partner had leaked the classified information.

A former partner consulting for the Australian government shared drafts of corporate tax avoidance laws with colleagues, which they used to contact potential clients. The leaks occurred between 2014 and 2017.

The company says it does not use any confidential information to help customers pay less tax.

However, politicians and officials have called for PwC Australia to be banned from awarding government contracts until it responds satisfactorily to the scandal.

On Sunday, PwC Australia said it had appointed Kevin Burroughs as its new CEO. He was previously head of global clients and industries for the PwC network.

“He will work with his colleagues and management team to regain the trust of PwC Australia’s stakeholders,” said Justin Carroll, chairman of PwC Australia’s management board.

The company said it would sell the Australian federal and state government business to private equity firm Allegro Fund, aiming to reach a binding agreement on the deal by the end of next month.

The sale will create two independent companies with no “disruption to essential services for public sector clients”, PwC Australia said.

In May, PwC Australia’s former chief executive Tom Seymour resigned after admitting he was one of at least 67 recipients of sensitive information.

Later that month, the firm put nine partners on leave and revamped its board of directors.

Australian Treasurer Jim Chalmers called the revelations a “shocking breach of trust”.

For the current financial year, the Australian government has a commitment to PwC worth A$255m, according to official figures.

Since the scandal first emerged, major pension funds including AustralianSuper as well as the country’s central bank have said they will not sign any new contracts with PwC.

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