Australia’s financial watchdog has issued an eight-year ban to a former PwC partner at the heart of a confidentiality scandal that triggered a reputation crisis at the firm and a costly sell-off.
The Australian Securities and Investments Commission has been investigating the conduct of Peter John Collins, of Sandringham in Victoria, who has been accused of sharing confidential government information about multinational tax avoidance with colleagues.
Eight years ago, Collins was advising Treasury on the draft laws, which were part of a global push to stop huge companies minimising their tax bills and shifting profits overseas. According to internal PwC emails obtained and published by the Senate, he shared confidential information with the warning “for your eyes only”.
Those emails also confirm the information from Treasury was used to secure work from “brand-defining” US companies in a push known internally as “the North American Project”.
The breach of confidentiality infuriated the federal treasurer, triggered a federal police investigation and a referral to a corruption watchdog from the Greens, prompted accusations the firm engaged in a “calculated” breach of trust and a “deliberate cover-up”, resulted in many partners being exited, and led to its entire government services division being divested for just $1.
In a statement, Asic said Collins would not be able to “provide financial services or [control] an entity that carries on a financial services business for eight years” because it no longer considered him to be “a fit and proper person”.
“ASIC found that Mr Collins disclosed confidential information he obtained in his roles as a tax advisor to the Commonwealth Treasury and the Australian Board of Taxation,” the watchdog said in a statement.
“Accordingly, ASIC found that Mr Collins is not a fit and proper person to provide financial services and that it was in the public interest to prevent him from working in the financial services industry.”
Collins has the right to apply to the Administrative Appeals Tribunal for a review of Asic’s decision.
The Asic deputy chair, Sarah Court, told a Senate inquiry on Friday it was still working through a list of 160 names of PwC Australia staff who hold financial services licences to determine any other potential misconduct.
“We are getting the information that we are able to get, we are liaising with PwC, we’re liaising with the Tax Practitioners Board,” Court said. “We’re continuing to do that matching exercise, if you like, to see if any of the authorised representatives that fall within our jurisdiction are connected, in any way, with the conduct … Mr Collins has been found to have engaged [in].”
The Asic chair, Joseph Longo, told the inquiry the regulator had a “limited” jurisdictional hook to look into the cultural and governance issues that surfaced in a report conducted by Ziggy Switkowski.
Despite Asic’s limitations, Longo said the regulator was still “certainly very interested” in being briefed on the extent of PwC’s problems.
The Labor senator Deborah O’Neill, who is part of the Senate inquiry that has helped reveal the depth of the scandal at PwC Australia, said: “Asic’s finding is a condemnation of gross misuse of confidential information and of the behaviour which PwC had not only tolerated, but seemed to actively cultivate.”
A review of PwC Australia’s internal culture by Switkowski, a former Telstra CEO, found partners who made the firm money were known as “untouchables” and “rainmakers” to whom “the rules don’t always apply”.
PwC Australia’s chief executive, Kevin Burrowes, repeatedly apologised to the Senate earlier this month while confirming six international partners were facing investigations for not raising the alarm when they received confidential government information.
“Six of our partners around the world were found to have not asked the questions they should have done in connection with the confidentiality breaches,” Burrowes said. “The firms in which they reside are taking appropriate action against them.”
