PwC Australia vows ‘severe’ consequences for tax leaking employees
PwC (PricewaterhouseCoopers) Australia interim CEO Kristin Stubbins told a parliamentary inquiry on Monday that the team would face “severe” consequences if found to have acted inappropriately in a scandal over sharing secret government tax plans. Australian with large multinationals to help avoid paying them.
PwC is currently conducting an internal investigation and has already suspended a number of executives, some of whom it named and others it did not.
Stubbins told the New South Wales state senate that once the investigation was complete, PwC would release all the identities of those found to be violating the rules.
“We hope to announce the consequences and you will do that publicly and they will see that they will be severe,” Stubbins said at the inquiry.
Meanwhile, a criminal investigation is also underway against the company.
It was Stubbins’ first public appearance since taking office last month, when his predecessor resigned over the scandal.
It also came a day after PwC Australia released a statement saying it was selling its public sector business for a token sum of AU$1 (about €0.60 or $0.67) in a bid to ensure that such conflict of interest does not recur.
What it is?
PwC is under fire after a former partner, Peter-John Collins, was privy to information about the Australian government’s plans to overhaul its tax laws – mainly in a bid to ensure that multinational tech giants like Google, Facebook or Amazon could not easily avoid paying tax in Australia.
He had signed a non-disclosure agreement with the government while working with him on the project, promising to keep the information secret.
But Collins shared the information with colleagues at PwC, who then used it to try to help private sector clients take precautionary steps to limit the impact of the new laws on their balance sheets.
The case raises serious conflict of interest issues, with PwC being a major service provider to the Australian authorities.
“We failed to meet the standards we set for ourselves as an organization and I apologize on behalf of our company,” Stubbins told parliament on Monday.
News of the indiscretions, which date back nearly a decade, surfaced earlier this year.
But the investigation picked up pace over the last month as the scope of the scandal began to become more apparent, thanks in large part to the content of internal company emails released by the inquiry on May 2.
Some of those partially redacted emails showed employees celebrating “the accuracy of the intelligence” about the new Australia tax plans Collins provided and how it gave them an advantage with potential clients, particularly US-based tech multinationals.
Last month, former PwC Australia CEO Tom Seymour resigned, criminal investigations were launched, nine partners were suspended without being named and four were suspended and identified – although two of them have publicly denied any wrongdoing.
Who are PwC and what do they do?
PricewaterhouseCoopers is one of the so-called “Big Four” consulting giants, the world’s largest professional services networks, along with Deloitte, Ernst & Young and KPMG.
These companies may just be genuine household names in specialist circles, but they are among the most important in the world for both the public and private sectors.
They provide services such as auditing and consulting (advice or analysis on all sorts of issues, potentially), and their main clients tend to be national governments and large private sector companies.
Their proximity to both industries and the comparable or overlapping services they provide to each have long raised questions about potential conflicts of interest.
Strictly speaking, none of the “Big Four” are unique entities. Technically, they’re networks of companies, each operating in individual countries, but all agreeing to unite under a global umbrella and abide by the same standards. All four controlling entities are registered in the UK.
Combined, the four groups’ revenues in the last fiscal year were around $190 billion – to give you a sense of scope, this is roughly comparable to the national GDP of Iraq or Greece.
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.