Business sells for $1, new CEO from Singapore

Beleaguered consultancy giant PwC Australia has named its new chief executive officer and announced it will sell off its government operations to a private equity firm for just $1.

The big four professional services firm on Sunday announced it would fly in a new CEO from its Singapore team as it attempts to repair the reputational damage caused by the tax leaks scandal.

PwC has been in crisis mode following revelations former taxation partner, Peter Collins, leaked sensitive and confidential government information to fellow partners and clients.

Mr Collins has since been banned from acting as a tax practitioner, and federal Treasury has referred the scandal to the Australian Federal Police for a criminal investigation.

In a bid to ward off further controversy, PwC confirmed on Sunday that all of its federal and state government business would be divested exclusively to Allegro Funds for a mere $1.

The new entity has been referred to as project “Bell”. It will become a company and will therefore be subject to corporate governance obligations and oversight from ASIC via the Corporations Act.

PwC Australia operates on a partnership model, meaning it is not incorporated and is not subject to corporate governance oversight, instead it has voluntarily adopted a code of conduct.

The deal involves about 130 partners and 2000 staff. The government consulting operations arm of PwC was responsible for about 20 per cent of the firm’s revenue in the 2023 financial year.

The firms are positioned to sign a binding agreement by the end of July.

Additionally, PwC’s global leaders will parachute Kevin Burrowes into the top job after they seizing control of the troubled Australian arm of the business.

Mr Burrowes will take over from Kristin Stubbins, who has been acting in the top job for almost seven weeks after former CEO Tom Seymour resigned in early May.

Mr Seymour quit after he was revealed to have received emails from Mr Collins containing confidential Treasury information.

Nine PwC partners were directed to go on leave immediately around the same time as Mr Seymour stepped down last month.

Mr Burrowes plans to relocate from Singapore to Sydney to become a PwC Australia partner and the firm’s CEO but he is yet to complete Australia’s immigration process.

PwC Australia’s move to divest its government operations comes after the federal government effectively barred the firm from any new contracts and the NSW government announced a temporary suspension on offering the firm any new tax work.

The consultancy firm said the sale of this part of the business to Allegro Funds would impact its future size and operations.

PwC Australia chair Justin Carroll said the sale was the “right thing to do for our public sector clients” and he hoped the move would protect the jobs involved in the firm’s government business operations.

“This was an extremely difficult decision, but we are determined to take all necessary steps to protect the jobs of our people and re-earn the trust of our stakeholders,” he said in a statement sent to media on Sunday.

Mr Burrowes will become PwC Australia’s new CEO following a stint as the PwC Network’s global clients and industries leader after first joining the firm in 1986.

PwC has said Mr Burrowe’s priority would be improving the firm’s culture, with a specific focus on “ethics and controls”.

He said he was “honoured” to have been selected to lead PwC Australia and vowed to “work tirelessly” to increase transparency and repair trust with the firm’s stakeholders.

PwC global chair Bob Moritz on Sunday said PwC Australia had failed to meet the global partnership’s professional standards and values under its past leadership.

“Its past actions are not representative of the work and behaviours of PwC around the world and I am deeply sorry to our clients, our broader stakeholders and our people,” he said.

“PwC Australia has significant work to do and I am confident that the steps they are taking with the network’s support will result in a stronger firm.”

Earlier this month Ms Stubbins released a statement stating, “I want to apologise on behalf of PwC Australia. For sharing confidential government tax policy information and for betraying the trust placed in us.”

She admitted there had been a clear lack of respect for confidentiality and that PwC Australia did not have adequate processes and governance in place.