By Ananya Bhattacharya, Quartz (TNS)
PwC is selling its scandal-ridden Australian government services business for next to nothing. The consulting firm June 25 announced the sale to Sydney-based private equity firm Allegro Funds for the price of just $1 Australian dollar ($0.67). The deal, which is expected to conclude at the end of July, will give rise to two different businesses, with PwC Australia exiting from all government advisory work, at both the state and federal levels.
The tax scandal involved PwC tax expert Peter John Collins, who leaked confidential government plans to other Australia staff to advise global companies on new tax laws. The Australian treasury has now batted Collins from the profession and is weighing a criminal case against him.
The embattled Big Four firm is now bringing on a PwC veteran to serve as its Australia CEO during this corporate makeover. Acting CEO Kristin Stubbins, who penned an apology over PwC’s failings in the scandal in May, will remain acting chief until Kevin Burrowes takes over.
PwC Australia’s government business, by the digits
- 20%: How much of PwC Australia’s 2023 revenue the government business arm generated, according to PwC.
- 1,750: People employed in PwC’s government business in Australia, whose jobs the company is aiming to protect during the divestment, according to PwC.
- $2.5 million: How much PwC charged in fees to advise 14 clients how to sidestep new tax avoidance laws in 2016, using the the confidential Treasury information.
- $750 billion: Value of five industry superannuation funds—AustralianSuper, Australia Retirement Trust, Hesta, Aware Super, and CareSuper—who stopped doing business with PwC following the scandal.
Quotable: This Australian lawmaker is not impressed
“I’m very concerned at this point of time that the motivations of those at PwC remain self-centered and not about service.”
A non-exhaustive list of what PwC is doing to get its Australia business back on track
Tom Seymour resigned from his role as PwC Australia CEO on May 8, days after disclosing he was one of dozens of partners who received emails that discussed plans to use confidential government tax policy information to win new clients. Seymour is still a partner at the firm. He’s looking at a September retirement.
On May 29, PwC directed nine partners to go on leave effective immediately. The same day, the company said it’ll appoint two independent, non-executive directors to its governance board, and it’ll publish Independent Review report and recommendations in full.
Employees involved in the scandal will face “severe” consequences, Stubbs told a state parliament enquiry today (June 26). The company isn’t shying away from naming-and-shaming. It’s already named four former partners directly involved in the breach of confidentiality, two of whom have publicly denied any wrongdoing.
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