PwC suspends 9 partners in Australian tax leak case

PwC suspended nine partners and pledged to publish the findings of an internal review later this year as it works to contain a tax leak scandal involving its Australian operations.

The company has come under intense public scrutiny after the release of emails that showed it used confidential information about changes to tax laws from the government to win new business.

The move to suspend nine partners – including members of its executive and governance board – is the latest escalation of a scandal that came to light in February. PwC said it would ringfence the work it does with the federal government in Australia to reduce conflicts of interest.

PwC employees have been told to “immediately go on leave . . . pending the results of our investigation”, according to the company.

Peter Collins, PwC’s former head of international tax, was banned by Australia’s tax watchdog this year for sharing confidential information with his colleagues about government plans to change tax avoidance laws. The emails reveal how PwC used confidential information to win new business.

The release of edited emails between Collins and other PwC partners in Australia and internationally has sparked a global crisis for the firm. PwC Australia head Tom Seymour resigned this month, while the Australian Treasury has referred the situation to federal police to consider a criminal investigation.

Kristin Stubbins, acting chief executive of PwC Australia, published an open letter on Monday to apologise. “I want to apologize on behalf of PwC Australia for sharing confidential government tax policy information and for betraying the trust placed in us,” said Stubbins. “No words can make it right.”

Stubbins said the leaks had exposed a “failure of leadership and governance” and what he called a “culture of aggressive marketing in our tax business” in Australia.

Tracey Kenair, chair of PwC Australia’s governance board, and paddy Carney, chair of its risk committee, have stepped down from their roles.

Stubbins said the firm would publish the findings of an internal review conducted by former telecommunications executive Ziggy Switkowski in late September.

PwC has not released the names of the partners who were involved in the emails or the names of the clients who potentially benefited from the advice generated based on the confidential information. A senator tried to forcefully remove the names at a hearing last week but was unsuccessful.

Deborah O’Neill, a senator from the ruling Labor Party who released the edited emails, said the scandal raised questions about the entire consulting industry. “The transition is real,” O’Neill said. “The people who honestly put the money above have a field day.”

Prime Minister Anthony Albanese told 2SM radio station on Monday that the scandal was a “terrible indictment” on the sector and that any government would need to consider “the ethical considerations that come from this PwC behaviour”.

Stubbins described the scandal as “personally and professionally devastating”. However, he did try to provide some distance for his customers.

“Our customers were not involved in any wrongdoing and no confidential information was used to enable the customers to pay less tax,” she said.

Collins has not responded to requests for comment since the scandal broke.