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One of the gatekeepers of the report PwC International is refusing to hand over to authorities works at PwC Australia in Sydney alongside CEO Kevin Burrowes — and has herself faced action over the tax leaks scandal.
Patricia “Paddy” Carney is not only a director of UK-based PricewaterhouseCoopers International Limited — and so is legally entitled to all its documents — but is also one of PwC Australia’s top executives.
“Dirty six” gatekeeper a top PwC Australia boss
Releasing international tax leak report unfair, dangerous: PwC
Edmund TadrosProfessional
PwC Australia believes authorities have the evidence they need to investigate overseas partners involved in the firm’s tax leaks scandal, supporting a decision by its international arm to withhold a legal report into the matter.
The report by international law firm Linklaters was paid for by PwC International and cleared overseas partners of using confidential information related to the leaks scandal “for commercial gain”.
PwC International, which has only released a brief summary of the report, disciplined six of the firm’s international operatives for not inquiring about the nature of what turned out to be leaked data. PwC Australia is a member firm of the global firm network run by PwC International.
A Senate committee examining consultants, the corporate regulator and other authorities have all unsuccessfully asked for a copy of the Linklaters report. PwC International has refused to release it, claiming it is legal advice that is confidential and privileged. Even PwC Australia operatives have not seen the report, local CEO Kevin Burrowes says.
The Senate consulting committee has warned the global outfit’s decision to withhold the document risks derailing the reform process underway at the Australian firm.
PwC global is resisting the document’s release in part because it does not want the tax leaks scandal to extend beyond Australia, and trigger scrutiny from US and British regulators.
PwC Australia’s view is that its global investigation concluded that none of the overseas partners “engaged in wrongdoing”, and to release information on them would violate their privacy and could endanger their safety.
A local spokesman said the six overseas PwC operatives “were not found to have engaged in wrongdoing, and in consideration of relevant privacy laws and the individuals’ safety, it would not be appropriate to disclose their names”.
He said the firm was cooperating with local regulators and had not withheld the names of any individuals outside of Australia who received confidential Treasury information.
Committee chairman Senator Richard Colbeck said the parliament had now heard evidence that the tax leaks scandal was “bigger than what happened in Australia”.
Senator Colbeck has said a group he originally dubbed the “dirty six” international PwC partners now looked more like the “dirty rotten scoundrels” of PwC.
“We’ve at last started to crack open the international nut. This is the next phase. And I’ve always believed from the outset that this was bigger than what happened in Australia,” he told The Australian Financial Review.
“PwC will never be able to move on until this is dealt with. I’ve told them from the start ... and from the evidence we’ve heard from the TPB, this will all come out through their investigations anyway.”
‘Damning indictment’
The senator said he was now going to “go back to the public accounts committees in the UK and the US” that he wrote to last year to see if they could help obtain the Linklaters report or any of the information the report contained.
Committee member Labor senator O’Neill said the global firm’s refusal to produce the report “is a damning indictment of [PwC Australia’s] supposed commitment to change”.
Another committee member, Greens senator Barbara Pocock, said PwC had an “obligation to come clean with the Australian public, the Senate and the investigating authorities”.
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Edmund Tadros leads our coverage of the professional services sector. He is based in our Sydney newsroom.Connect with Edmund on Twitter. Email Edmund at edmundtadros@afr.com.au