PwC Global takes control of Australia arm, replaces CEO
PWC’S global leaders have seized control of the Australia unit at the centre of a tax scandal and replaced the chief executive, the Australian Financial Review (AFR) reported.
Kevin Burrowes will relocate to Sydney from Singapore to take over as chief executive from Kirstin Stubbins, the AFR reported on Sunday (Jun 25), citing Justin Carroll, chairman of the firm’s governance board. Stubbins has been acting in the role for almost seven weeks, the report said. Burrowes’ most recent role was as the firm’s global clients and industries leader.
The firm is planning to sell off its government consulting arm to private equity investor Allegro Funds for just A$1 (S$0.90), the AFR said in a separate report on Sunday, citing the company. About 130 PwC Australia partners and up to 2,000 staff from the government consulting arm will move to a new company, codenamed Bell, the report said.
If the deal goes through, Allegro will set up the new firm as a corporation, not a partnership, said a source not authorised to speak with media. Ownership will be split between Allegro and the former PwC partners, although the exact split was not known, the source added. A spokesperson for Allegro Funds declined to comment.
PwC said the divestment represented around 20 per cent of revenue for fiscal 2023. The firm made A$3 billion in revenue last financial year.
“We have taken this step because it is the right thing to do for our public sector clients and to protect the jobs of the 1,750 talented people in our government business,” said PwC Australia board chair Justin Carroll.
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The deal attempts to insulate the firm’s government consulting business and rebuild trust with the many departments and agencies that have frozen the firm out of new work.
The proposed sales to Allegro would mean PwC stopping all of its government advisory work, at both the state and federal levels, the AFR said.
The Australian arm of the global consulting giant has been under pressure following revelations that a former senior partner obtained confidential tax policy information while advising the government and the firm then used it to advise global clients. The firm stands to lose millions of dollars in revenue due to its breach, as clients review their relationship with the consultant.
Labor Senator Deborah O’Neill, who helped release a cache of internal PwC e-mails last month, said the firm cannot “phoenix their way out” from the scandal until it reveals the full details of those involved in the confidential document breach. “More of the same with a new name is still more of the same,” she said in a statement.
Global PwC chair Bob Moritz publicly apologised in a statement and said PwC Australia had failed to meet the firm’s standards and values under past leadership. BLOOMBERG, REUTERS
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