15 May 2023
PwC Tax Scandal: Former NBN Co-Chairman Leads Independent Review, CEO Resigns
The PwC tax scandal has taken a global turn as former NBN co-chairman Ziggy Switkowski takes the helm of an independent review of PwC’s troubled Australian operations. Switkowski has been granted the authority to dismiss individuals involved in the scandal, which revolves around the firm’s use of confidential tax policy information. Meanwhile, former CEO Tom Seymour has resigned amidst the controversy.
To address the issue that is now impacting some of PwC’s major global clients, top executives from PwC Global, including Diana Weiss, Carol Stubbings, and Coenraad Richardson, have flown into Australia to oversee an independent review aimed at rebuilding the firm’s reputation.
PwC announced on Monday that Switkowski would lead the review, focusing on the firm’s governance, accountability, and culture, in response to the findings of the Tax Practitioners Board’s investigation into the unauthorized use of confidential information. Due in September, the report will guide PwC’s actions, including potential personnel and partner exits from the firm.
At a Senate estimates hearing earlier this year, the Tax Practitioners Board revealed that up to 30 PwC staff members shared confidential information through email. Despite this revelation, PwC has confirmed that some individuals still hold senior positions within the company.
Acting CEO of PwC Australia, Kristin Stubbins, expressed confidence in Switkowski’s ability to conduct a thorough review, emphasizing that he would have access to all necessary resources and information. PwC looks forward to receiving his report and swiftly implementing its recommendations.
However, concerns have been raised regarding the independence and transparency of the review process. Senator Deborah O’Neill, chair of the Corporations and Financial Services Committee, highlighted the need for public access to the findings and expressed skepticism about the firm’s ability to ensure without a strong ethical foundation. She suggested that the National Anti-Corruption Commission should investigate the matter for a more impartial examination.
PwC has also announced the appointment of Tony O’Malley as its Australian business’s chief risk and ethics national governance and structures leader. This move comes as the stakes are high, with major global corporations like Apple, Google, and Microsoft reportedly being targeted with confidential information related to the government’s efforts to combat tax avoidance.
Following other recent resignations from leadership roles, Rob Silverwood has been appointed as the head of PwC’s Financial Advisory business. Nicole Salimbeni will lead the response plan for establishing a proper organ.
In addition to his departure from PwC, Tom Seymour has also stepped down from the board of Australian Missile Corporation, a well-connected military contractor chaired by former defense minister Christopher Pyne. Seymour’s removal as a director of the company followed a board restructure. Australian Missile Corporation, fully owned by defense contractor Nioa, was established to collaborate with the Defense Department in developing an Australian-based Guided Weapons and Explosive Ordnance Enterprise.
Although Seymour confirmed receiving the emails containing confidential information, he denied any knowledge of the breach of the confidentiality agreement by PwC partner Peter Collins. Collins faced a two-year professional ban from the Tax Practitioners Board earlier this year due to his role in the breach.
As the independent review progresses and PwC aims to address the cultural and ethical concerns raised by the scandal, the outcomes and recommendations of the review will be highly anticipated, with the public and stakeholders seeking reassurance and transparency from the firm.