A new CEO has been parachuted in to run the embattled consultancy firm PwC Australia, which is offloading its money-making government consultancy business for $1 (US$0.67).
Acting CEO Kristin Stubbins has been turfed after seven weeks and will be replaced by the parent’s Singapore-based global clients and industries leader Kevin Burrowes.
PwC also announced it has entered into an exclusivity agreement to divest its federal and state government consultancy business to private equity firm Allegro Funds for a nominal fee of $1.
Burrowes, who is still waiting on visa approval so he can relocate and will become a partner in PwC Australia, said on Sunday he is honoured to take up the role.
“Along with the leadership team, I will work tirelessly to increase transparency and repair trust with our stakeholders, while also enhancing our governance and culture,” he said on Sunday.
PwC Australia has faced immense pressure since it was accused of abusing its trusted role as an adviser by leaking information about proposed federal government tax changes to clients for financial gain.
Former PwC partner Peter Collins has since been referred to federal police and nine other partners have stood down.
Chief executive at the time, Tom Seymour, apologised and stepped down from his role in May, with the firm saying it needed to rebuild trust with the government and public.
The sale of PwC’s government contracts to Allegro, expected to be finalised by the end of next month will protect 1,700 jobs, PwC Australia board chair Justin Carroll said.
“This transaction will result in the first pure play, at scale, government business in the market,” he said.
“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.”
The divestment of the government consultancy business will create two separate firms.
It also means PwC Australia’s exit from all government advisory work, at both the state and federal levels.
That business generated about 20 percent of the Australian firm’s fiscal year 2023 revenue.
But PwC said it would allow the firm to move on from the tax leak scandal and ensure stability for the rest of its clients in other parts of the business.
An independent review of PwC’s conduct in the scandal headed by 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.
Last week, a Senate committee labelled PwC’s conduct in the tax advice scandal as a calculated and egregious breach of trust.
The committee’s interim report recommended that PwC publish the names of partners who were involved, as well as cooperate with investigations by the federal police and the Tax Practitioners Board.
A New South Wales government inquiry is also examining the use of PwC consultancy services and has temporarily suspended taxation-related contracts with the firm.
