PwC Australia’s former long-time general counsel revealed the consulting giant would frustrate the Australian Taxation Office’s repeated requests for information by incorrectly claiming legal privilege over thousands of documents.

Meredith Beattie, who was summoned to appear before a Senate inquiry examining structural challenges in the audit, assurance and consultancy industry, said the ATO raised concerns in 2017 that Peter Collins, the former head of international tax for PwC Australia, had shared confidential information.

Collins was cleared as no confidentiality requirement had been signed, but by 2018, the ATO had significantly ramped up its communication with the consulting giant, asking for it to produce documents.

“In relation to the response to the ATO notices … what became apparent to me in 2018 was that certain parts of the tax group had not been following the protocols, they had not been following the legal engagement letters, and the effect of that meant that the privilege claims that had been made by the firm in response to the ATO notice were not valid,” Beattie said.

“I raised the issues with a group within the firm called the significant litigation committee [made up of the board] … and as a result of the letter we had received from the Australian Taxation Office, I think it was in April 18, they were raising very serious allegations about the firm that was using privilege in a way that was designed to hide matters from the tax office and that concern had been ignited by the firm’s response to the ATO notices.”

Beattie said she raised her concerns with Tom Seymour, who was the then-managing partner of the financial advisory team, and launched a review, in which it became clear the tax team was claiming legal privilege over documents without a proper basis.

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“It was apparent to me at the time that this issue became evidence, and that there was a culture within parts of the tax group that were problematic,” Beattie said.

When inquiry chair Deborah O’Neill asked who was responsible for “frustrating” the ATO by wrongly claiming legal privilege, Beattie said she would reframe the question to ask: “Who was it within PwC who permitted the practice to proceed on a basis that was inconsistent, contrary, in breach of the firm’s protocols?”

“The leader of the tax group at the time was Mr Seymour.”

Beattie was so concerned about Seymour, she used her position as partner of PwC for the first time to vote against his elevation to lead the Australian arm in 2020.

It is the first time Beattie has testified in public about the tax leaks scandal. She will return to the inquiry to provide further evidence in-camera.

Seymour will also give evidence later today for the first time.