PwC’s Australian business is set to offload a government services division that has dragged the firm into weeks of lurid front-page headlines.
The down under branch of the consulting firm is selling its public sector advisory business to a private equity firm Allegro for $1, and bringing in a new CEO of the overall business in a bid to put a tax avoidance scandal behind it.
The government services wing accounts for roughly 10 per cent of the firm’s employees in Australia.
The divestment would hit revenues to the tune of around 20 per cent and affect the firm’s “future size and operations,” PwC said.
The consulting giant also announced that Kevin Burrowes would become CEO of the Australian wing.
Since news of the scandal broke, a host of pension funds have said they wouldn’t do business with PwC, with one last week saying “out of an abundance of caution” it was pulling its business.
Some Australian politicians are pushing for an international investigation into the firm.
The chair of an Australian senate investigation into PwC’s handling of the scandal last week said “this was something being worked on, negotiated, globally.
“There’s no doubt in my mind that other jurisdictions should be looking at this matter… it would be in their interests to do so.”
“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 circa 1,750 talented people in our government business,” said PwC Australia Board Chair Justin Carroll after the news broke yesterday.
SO WHAT DID PWC DO?
Around a decade ago, PwC Oz’s tax expert Peter-John Collins was invited in by the government to help design multi-national tax laws, in theory preventing global firms shifting their tax around. Despite signing a host of confidentiality agreements, Collins shared the intel with colleagues at PwC – who used it to help design ways their clients could avoid paying that very same tax.
What could have been an isolated incident changed into something else when a host of internal emails came to light in which PwC employees talked up the information given to them by Collins. In short – everyone knew, and nobody said anything.
WHO ELSE WAS INVOLVED?
PwC has named at least 67 current and former staff involved in the leak in an unpublished letter to the Aussie government. It remains secret.