The former chief executive of PwC Australia has said it is “difficult to accept” that international partners have not been named in the wake of the tax leaks scandal that has plagued the firm.
PwC became embroiled after revelations that the consultancy’s Australian arm used confidential information about planned tax-avoidance legislation to win new business. Uber and Google were among the companies to have engaged with the firm.
PwC Australia named a number of partners who left the firm as a result of the scandal, but PwC International has refused to publish a report from law firm Linklaters about how the information was used by unidentified overseas partners, much to the frustration of Australian politicians and regulators who have called for full transparency.
Tom Seymour, who resigned as PwC Australia chief executive last year and was its former head of tax, appeared in front of a senate committee on Friday, his first appearance at hearings into the affair. He said it was “difficult to accept” why the Australian partners had been named while the international partners had been protected.
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However, he added that it may have been hard to determine whether the information shared was known to be confidential by all who received it.
PwC’s Irish business was dragged earlier this year into the international fallout over the leaking, when it emerged that former PwC Australia tax partner Peter-John Collins, who was banned last year from practising as a tax agent after sharing secret information, sought in 2015 to tap PwC Ireland’s contacts with technology companies in the United States to share his insights.
PwC Ireland has repeatedly declined to disclose the identity of the individual in its firm that received the email, or whether they received any confidential information on Australian tax plans.
Deborah O’Neill, chairwoman of the senate committee, repeated a call for the Linklaters report to be published, describing it as “incredibly disrespectful and frustrating” that PwC International still had not released it on the basis that it was confidential. She said Australian politicians, leaders of PwC Australia and the UK Financial Reporting Council had called for it to be published.
The PwC affair has led to spending being slashed on outside consultants in Australia and recommendations being made on how the industry can improve its transparency and governance. PwC Australia this week appointed former Macquarie director John Green as the first independent chairman of its board.
However, the latest senate hearing revealed further details that shed light on the culture and practices of PwC in Australia in recent years.
Former chief Mr Seymour said a review identified five people who were deemed to have engaged in “problematic” practices around PwC Australia’s development of advice to multinational companies.
He said PwC had developed a structure around multinational corporate tax, launched in 2015, “that should not have been in place and [was] not within the intent of the law”. He said PwC closed the scheme and reported it to the Australian taxation office.
Meredith Beattie, the former general counsel for PwC Australia, also claimed at the hearing that there were issues with the culture within the tax practice, which had erroneously used legal privilege to withhold documents from the tax office during initial investigations. Mr Seymour disputed that characterisation.
Kevin Burrowes, the current PwC Australia chief executive who was parachuted in last year to run what was once one of the global firm’s most profitable arms, said at the hearing that the international arm was continuing to review what lessons could be learned from the tax leaks scandal.
He denied that he was conflicted in his role after recent revelations that he was being paid 1.2 million Australian dollars (€717,210) by PwC International on top of his PwC Australia salary. – Copyright The Financial Times Limited 2024
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