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PwC suspends nine partners in the wake of the Australian tax scandal

In an effort to control the tax leak scandal rocking its Australian business, PwC terminated nine partners and promised to publish the findings of an internal investigation later this year.

Following the publication of emails revealing that the corporation had utilized privileged information about upcoming tax law changes from the government to secure new business, the company has come under heavy public criticism.


A crisis that started in February has recently escalated with the decision to suspend nine partners, including members of its executive and governance board. To reduce conflicts of interest, PwC promised to ringfence the work it undertakes with the Australian federal government.


According to the business, the PwC personnel has been instructed to "go on leave effective immediately... pending the outcome of our investigation".

Australia's tax watchdog suspended former PwC international tax chief Peter Collins last year for disclosing information to his coworkers about government plans to alter tax avoidance legislation. The emails demonstrated how PwC had utilized private data to secure new business.


Collins and other PwC partners' redacted emails have been made public, and this has caused a crisis for the company globally. PwC Australia's head, Tom Seymour, resigned this month, and the Australian Treasury has asked the federal police to look into the matter.


PwC Australia's acting CEO Kristin Stubbins apologized in an open letter that was released on Monday. "I want to apologise on behalf of PwC Australia. For sharing confidential government tax policy information and for betraying the trust placed in us," said Stubbins. "No amount of words can make it right"


A "culture of aggressive marketing in our tax business" in Australia, according to Stubbins, and a "failure of leadership and governance" were both brought to light by the leak.


Both Paddy Carney, chair of PwC Australia's risk committee, and Tracey Kennair, chair of the governance board, have resigned from their positions.


At the end of September, according to Stubbins, the company will publish the results of an internal investigation led by former telecom executive Ziggy Switkowski.


The clients who might have profited from the advice PwC customized based on the confidential information or the names of the partners who were mentioned in the emails have not been disclosed. In a hearing last week, a senator tried to coerce the identities to come out, but she was unsuccessful.


The censored emails were released as a result of pressure from Labor Party senator Deborah O'Neill, who claimed that the incident had cast doubt on the whole consultancy sector. "The contagion is real," O'Neill declared. "Those people that have put money above integrity have had a field day."


The incident is a "terrible indictment" on the industry, according to Prime Minister Anthony Albanese, who also stated that any administration would have to take into account the "ethical considerations that come from this PwC behaviour."


The affair was deemed "personally and professionally devastating" by Stubbins. However, she made an effort to keep her customers at a distance.


"Our clients were not involved in any wrongdoing and no confidential information was used to enable clients to pay less tax," the spokesperson stated.


Since the scandal broke, Collins has not replied to requests for comment.

By fLEXI tEAM


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