The head of a second parliamentary inquiry has demanded answers from PwC International after reports it took control of the Australian firm to contain the tax leaks scandal, warning senior managers need to “come clean” and “bare their necks”.
The rebuke by Liberal senator Richard Colbeck, who chairs the senate inquiry into the consulting industry, comes a day after the head of a separate inquiry, Labor senator Deborah O’Neill, called for PwC International bosses to face questions.
“They need to clear the air and come clean,” Colbeck said. “The only option for them is to basically bare their necks. They’ve chosen not to do that. It’s going to become increasingly unsustainable for them to do that.”
Colbeck’s latest criticism relates to PwC International’s refusal to share a report by the law firm, Linklaters, which was used to clear international partners of wrongdoing, and allegations it placed the Australian firm into “supervised remediation” last year.
On Monday, the Australian Financial Review reported PwC International sent a legal letter to PwC Australia in June, which sought control of its operations and that it was considered a “defaulting firm” under an undisclosed network agreement.
PwC Australia has rejected claims it is under the control of the global network. Its chair, Justin Carroll, said that it was “entirely appropriate that we work with our global colleagues on our remediation actions and to rebuild trust”.
But Colbeck remains convinced. His inquiry will request a copy of June letter and any legal agreement that would allow PwC International to take a more active role in running the Australian firm.
“I would like to understand the arrangements and probably some people within PwC Australia would like to understand them too,” Colbeck said.
O’Neill said confusion about the role of the global network was “a very big problem” for Australian politicians and regulators seeking answers.
“What we are really dealing with is not PwC Australia, but rather a very amorphous international conglomerate,” O’Neill told the ABC on Tuesday.
Last month, PwC Australia’s former acting chief executive, Kristin Stubbins, told the Senate inquiry the international firm intervened to ensure then Singapore based executive, Kevin Burrowes, was appointed as her replacement.
“I received a phone call from the global chair, Bob Moritz, saying that he was going to recommend to the Australian board that Kevin Burrowes be appointed as chief executive officer,” Stubbins said.
PwC Australia said Burrowes reported to the Australian board and rescinded his PwC International role when appointed chief executive. But O’Neill said the intervention showed “how hands on PwC Global is with regard to brand crisis management”.
PwC Australia has repeatedly told parliament it cannot share the Linklaters report as it belonged to the international firm – a separate entity – and that it has been refused access on multiple occasions.
Colbeck also said the firm needed to name the six international partners who, according to the Linklaters report, received confidential Australian government information and did not raise questions about where it had come from.
PwC Australia believes the evidence used to inform the Linklaters report has already been handed over to Australian regulators.
“While we are mindful of recent requests to publicly identify persons who received confidential information outside of Australia, those individuals were not found to have engaged in wrongdoing, and in consideration of relevant privacy laws and the individuals’ safety, it would not be appropriate to disclose their names,” a PwC spokesperson said.
“PwC Australia continues to cooperate fully with regulators and has not withheld from production the names of any individuals outside of Australia who received confidential Treasury information.”
