PricewaterhouseCoopers (PwC) Australia on Monday ordered nine partners to take leave and overhauled its governance board, as it battles a national scandal over the misuse of confidential government tax plans.
The “big four” firm is reeling after a former tax partner consulting on new anti-tax avoidance laws shared confidential drafts with colleagues that were then used to drum up business.
In an open letter, acting chief executive Kristin Stubbins said she wanted to apologise on behalf of the firm for “sharing confidential government tax policy information”, and said nine partners had been directed to take leave.
“We know enough about what went wrong to acknowledge that this situation was completely unacceptable. No amount of words can make it right,” she said.
The Australian Treasury referred the matter to police for a criminal investigation last week. PwC agreed to stand down from government work any implicated staff a day later.
Ahead of parliamentary hearings this week expected to focus on the scandal, the firm said the chair of its Governance Board and the head of its risk committee will also step down, and two independent directors were set to join the board.
The firm also announced plans to ring-fence its lucrative government contracting business from other parts of the firm as it tries to head off calls for a total ban on government contracts. The business will have a separate board.
“It is now clear that when we learned of the confidentiality breach and related issues we failed to conduct an appropriate root cause investigation,” Stubbins said in the statement.
“That was the result of a failure of leadership and governance.”
The heart of the issue is that a then-partner on tax at PwC shared confidential information with colleagues while advising the government on new rules to crack down on tax minimisation by multinational companies.