- By Annabelle Liang
- Business Correspondent
PwC Australia says it will sell its government business for A$1 ($0.70; £0.50) after a scandal over its misuse of secret government tax schemes.
The accounting giant also announced the appointment of a new chief executive in the country.
In January, it emerged that a former PwC Australia partner had leaked confidential information.
A former partner who advised the Australian government shared drafts of corporate tax avoidance laws with colleagues, who used them to pitch to clients. The leaks occurred between 2014 and 2017.
The company claims that no confidential information is used to help customers pay less tax.
However, politicians and officials have called for PwC Australia to be banned from being awarded government contracts. Until the corruption is satisfactorily answered.
Earlier this month, PwC Australia said it had identified 76 current and former partners linked to the scandal and handed their names over to Australian lawmakers.
On Monday, PwC Australia’s acting chief executive Kristin Stubbins told a parliamentary inquiry that staff found to have acted improperly could face “severe” consequences.
“We fell short of the standards we set for ourselves as an organization, and I apologize on behalf of our company,” he said.
PwC Australia on Sunday appointed Kevin Burrow as its new chief executive. He was previously Global Clients and Industry Leader of the PwC Network.
“He will work with his colleagues and management team to regain trust with PwC Australia’s stakeholders,” said Justin Carroll, chairman of PwC Australia’s management team.
The company said it is selling its Australian federal and state government business to private equity firm Allegro Funds, with the aim of reaching an agreement on the deal by the end of next month.
PwC Australia said the sale would create two independent companies “with no disruption to core services to public sector clients”.
PwC Australia’s government business has approximately 1,750 employees and accounts for approximately 20% of its annual revenue.
In May, PwC Australia’s previous chief executive, Tom Seymour, resigned after he admitted being one of at least 67 people who received sensitive information at the center of the scandal.
Later that month, the firm reshuffled its management team, putting nine partners on leave.
Australia’s Treasurer Jim Chalmers called the revelations a “shocking breach of trust”.
In the current financial year, according to official data, the Australian government has entered into contracts with PwC worth A$255 million.
Since the scandal first emerged, major pension funds including AustralianSuper and the country’s central bank have said they will not sign any new contracts with PwC.