PwC sends global leaders to Australia to damage control spiralling crisis
Facing the risk of spiralling global crisis, PwC is scrambling to contain the damage caused by the ‘government leak scandal’ in Australia. According to the Financial Times, some of the company’s top leaders have landed in Australia with the aim to control the damage and rapidly rebuild trust.
The scandal centres around PwC’s use of confidential government tax plans to advise its corporate clients on new anti-tax-avoidance rules. Emails released by an Australian senate committee revealed that PwC had used information received during its work with the government to win business.
The published emails, sent between 2014 and 2017, detail millions of dollars of business won by targeting clients. Australian politicians have called for the partners who received the emails, as well as the clients that benefited from the information, to be named.
The scandal has unleashed widespread criticism on PwC, across multiples levels of government and regulatory bodies.
Deborah O'Neill, the Australian Labor senator who triggered the publication of the emails, said that PwC’s internal messages had shown a “moral and ethical failure.” She also suggested that this was not a problem with just a couple of bad apples, but rather a widespread cultural problem that has global implications.
O’Neill said she would continue to push for the release of the list of clients and PwC partners involved in sharing the confidential information.
PwC's global leaders are trying to understand the full extent of the involvement of partners outside Australia and whether there was a wider cultural problem at the firm. The firm's global chair, Bob Moritz, said that the firm would support partners whose clients were affected.
According to a senior leader close to the matter cited by the Financial Times, the potential “spillover effect” on PwC’s reputation internationally is “slightly terrifying” for the firm.
The firm has hired law firm Linklaters to carry out a PwC review into the scandal, on top of a similar independent review launched by the Australian organisation.
Meanwhile, PwC is also preparing to contact the affected clients given the likelihood that their names could be released in the coming weeks.
Leading the team of top executives that have flown into Sydney are Diana Weiss, global general counsel, Carol Stubbings, global head of tax.
On the ground, three senior leaders have been ousted in the days following the revelations. CEO Tom Seymour stepped down after admitting he had been copied on emails “about the marketing strategy and financial success of the tax advice.” He said however that he was not aware that the tax advice PwC had tailored was based on confidential government information.
The managing partner of the Financial Advisory division, Pete Calleja, and the firm’s Chief Strategy, Risk and Reputation Officer, Sean Gregory, also stepped down from their leadership roles this week.
In a statement on the case, global chair Moritz stated: “PwC’s leadership has taken swift action in response to the email disclosures in Australia – with new leadership, initiating independently-supervised reviews of the events and re-emphasising that the unauthorised sharing of and/or utilisation of confidential information is unacceptable and goes against our culture, values and professional standards.”
“We will continue to take all appropriate steps to deal with this thoroughly and effectively."
Notably, PwC has placed the concept of “trust” at the heart of its image since a 2021 rebrand. With its reputation now taking a serious hit due to its dealings in Australia, the firm is working hard to prevent any further damage.
