PwC’s decision to sell its scandal-plagued government services business in Australia has done little to ease its troubles in the country, with a senior lawmaker questioning the firm’s motives.
PwC, which has been under fire after it used confidential information gathered during its tax advisory work with the government to advise global companies on how to benefit from new tax laws, on Sunday announced the sale of its government business for A$1 (67 cents).
Senator Deborah O’Neill, a member of the governing Labor Party and head of the finance committee that’s been pushing for more details on the scandal, criticized the decision.
“We have this unseemly haste with a profit-driven motive to try and phoenix itself back into some sort of connection with the government,” she told ABC Radio Monday. “I’m very concerned at this point of time that the motivations of those at PwC remain self-centered and not about service.”
The consulting firm said the deal to offload that part of its organization to Sydney-based private equity firm Allegro Funds, would allow it to “move forward with predictability and focus and ensure stability” for its other clients. The sale represents about 20% of its local revenues and will help protect about 1,750 jobs, PwC said.
Read More: PwC Australia Tax Scandal Fuels Global Implications: Explained
PwC admitted to governance failures, with global chairman Bob Moritz saying that the business failed to meet its own code of conduct and uphold professional standards and values.
“Its past actions are not representative of the work and behaviors of PwC around the world and I am deeply sorry to our clients, our broader stakeholders and our people,” Moritz said in a statement Sunday.
The firm said it had taken a number of steps to “enhance its governance, culture and accountability.”
As well as hiving off the government services unit, PwC announced the appointment of Kevin Burrowes, a 37-year veteran of the firm, as the new CEO of the Australian operations. Earlier in his career, Burrowes held senior executive positions at International Business Machines Corp., Credit Suisse Group AG and Royal Bank of Scotland Plc, according to the statement. His main priority will be to focus on ethics and controls as the firm looks to regain the trust of its stakeholders, it said.
Rebuilding Trust
That won’t be an easy task; PwC has already been frozen out of a number of high profile jobs because of the scandal.
“It’s just got from worse to worse,” O’Neill said.
She said it would take a lot of work to rebuild trust between the government and the new Allegro company which will be dominated by PwC staff. “You can’t just rebirth your way out of the cultural practices of the mothership that they’re coming from,” she said.
Allegro, founded by Chester Moynihan and Adrian Loader in 2004, earlier this year bought law firm Slater & Gordon Ltd., according to its website. The firm has more than A$4 billion ($2.7 billion) in assets under management.
