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The troubled consultancy firm PwC Australia has appointed a new CEO and confirmed it will sell off its government business as it tries to stem the fallout from a massive tax leak scandal.
- PwC is splitting into two parts and will sell its federal and state government business to private equity firm Allegro Funds for $1
- PwC came under fire earlier this year over revelations some of its senior partners misused confidential federal government information
- The company's Australian CEO quit and nine senior partners stood down over the scandal
The firm has announced Kevin Burrowes, a leader for its global business based in Singapore, will move to Sydney to take over from acting CEO Kristin Stubbins.
PwC is also splitting into two parts, saying it would sell its federal and state government business to private equity firm Allegro Funds for $1.
"We have taken this step because it is the right thing to do for our public sector clients and to protect the jobs of the [roughly] 1,750 talented people in our government business," board chair of PwC Australia Justin Carroll said in a statement announcing the appointment.
"This transaction will result in the first pure play, at scale, government business in the market.
"This was an extremely difficult decision, but we are determined to take all necessary steps to protect the jobs of our people and re-earn the trust of our stakeholders."
PwC came under fire earlier this year over revelations some of its senior partners misused confidential federal government information to help big multinational companies avoid paying more tax.
The company's Australian CEO quit and nine senior partners stood down over the scandal.
PwC's international tax expert Peter-John Collins is being investigated by the Australian Federal Police.
In December 2022 the Tax Practitioners Board (TPB) announced it had suspended Mr Collins's tax licence for two years because of integrity breaches.
The TPB found Mr Collins had been leveraging his insider knowledge to benefit PwC and had failed to manage his conflicts of interest — putting him at odds with the codes he must comply with as a tax agent.
In January, after the Australian Financial Review (AFR) published a story saying Mr Collins leaked government tax plans to clients which led to his deregistration, Treasurer Jim Chalmers said he was "absolutely furious, absolutely ropeable about these revelations".
"There is no consultation without trust, and we want to be able to consult in a meaningful way when changes to the tax system are in prospect. And the actions that we've seen alleged and reported cut across that," Mr Chalmers said.
"This is a shocking breach of trust, an appalling breach of trust."
The federal government was one of PwC Australia's biggest clients, with the government using the firm for a range of services including consulting on defence, education and transport spending, and even potential changes to the law.