The consulting firm PwC has announced a new Australian boss and confirmed it will divest itself of all government work in Australia by spinning off a new company for $1.
PwC Australia has appointed British executive Kevin Burrowes to head up its Australian division as the firm confronts multiple scandals involving its handling of sensitive public information. Last week a Senate committee found it had engaged in a “calculated” breach of trust by using confidential government information to help clients avoid tax.
Burrowes is currently based in Singapore and leads PwC Network’s global clients and industries but will relocate to Sydney and become a partner in PwC Australia. Kristin Stubbins will remain acting CEO until the transition is complete.
The firm also confirmed it will divest itself of all federal and state government business by spinning off a new company as part of a buyout by private equity investor Allegro Funds for just $1.
News of the plan emerged last week when it was reported that 130 PwC Australia partners and 1,750 staff would move to a new company that had been codenamed “Bell”.
Allegro Funds advertises itself as specialising in “rebuilding” struggling firms, with its website describing it as “Australia’s most-awarded team in the turnaround, special situations and transformation investing space”.
On Sunday PwC said both parties would enter into a binding agreement by the end of July, creating two independent firms which Carroll said would ensure “no disruption in vital services to public sector clients”.
“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,” she said.
In a statement on Sunday, Justin Carroll, chair of PwC’s governance board, thanked Stubbins for her leadership “during this challenging period marked by rapid change”.
Carroll said Burrowes’s new role will be to “lead the management team and serve as Chair of the firm’s executive board to ensure the firm fully responds to the need to enhance leadership and governance and reinforce our values throughout the organisation”.
“We look forward to welcoming Kevin to our firm and leveraging his decades of executive leadership, unique experience working with PwC’s largest global clients and his extensive knowledge of the PwC Network,” he said.
He also said the priority for Burrowes going forward will be to “enhance the firm’s culture, with a focus on ethics and controls” to “re-earn trust with PwC Australia’s stakeholders.”
But the Labor senator Deborah O’Neill said: “Yet again PwC Australia and PwC Global is putting profit ahead of truth telling” and that the company has yet to address several key questions about its conduct despite multiple inquiries underway.
“The unseemly haste to deal with their profit pain, as evidenced here, is at odds with the tardiness of a response to questions that remain unanswered,” O’Neill said.
“More of the same with a new name is still more of the same.”
State and federal departments of finance both said they would be waiting to assess the impact of the proposed restructure.
The Australian Department of Finance said it would “carefully consider the implications of these changes for existing and future contracting arrangements”.
The NSW minister for finance, Courtney Houssos, said the state government would be assessing the integrity of the divested business as part of a broader promise to combat waste and ineffectiveness in consultancy hires.
The onus would be on Allegro Funds to demonstrate that high standards expected by the government would be met, she said.
An independent review of PwC’s conduct in the scandal headed by the former Telstra boss Ziggy Switkowski is due to be released in September.
Burrowes will work with others to implement the recommendations, according to the company.
– with Australian Associated Press
