Monday, 25 September, 2023

Scandal-hit PwC Australia sells govt advisory business

Scandal-hit PwC Australia sells govt advisory business

Popular News

SYDNEY: Consulting giant PwC said Tuesday it had offloaded its lucrative Australian government advisory business for Aus$1 (US$0.67), as it tries to move on from a damaging tax leak scandal.

PwC Australia has been mired in controversy since January, when news emerged that staff had shared information from a confidential government tax briefing to drum up new business, reports AFP.

After sacking a string of executives on Monday, PwC on Tuesday completed the sale of its government advisory business, which held contracts worth Aus$255 million (US$167 million) last year.

Buyer Allegro Funds said the new entity would be called Scyne Advisory and would have around 1,750 staff.

In a statement provided to AFP, Scyne Advisory partners Tim Jackson and Ben Neal said: "We have a once-in-a-generation opportunity to lead the change required in government advisory in Australia."

The needs of clients would remain "paramount", they said, adding: "Restoring those clients' trust is our number one priority".

The sale means that Scyne could be liable to pick up new government contracts and continue work that may have been taken from PwC.

The scandal that led to the sale dates back to 2015, when the Australian government introduced a series of new rules designed to stop foreign firms shaving their tax obligations by shifting profits to offshore havens.

A government inquiry earlier this year found that a senior PwC staffer who was briefed on the reforms shared the information with other partners, breaching confidentiality rules.

The firm then used its knowledge of the new rules to "aggressively market" itself to new customers, the inquiry said.

Australian police have been investigating the leak since late May, while the parliament's powerful finance committee is gearing up to question executives at a series of public hearings.

PwC Australia has previously admitted that it suffered from "poor decision making" and that "aggressive behaviour" in parts of the business allowed "profit to be placed over purpose".