KPMG removed tax partner after UniSuper complaint
KPMG allegedly replaced a tax partner working on its lucrative UniSuper account after fund executives complained when he told the board that a proposed complex intercompany transaction would draw tax authority scrutiny and should not be allowed.
The proposed arrangement, suggested by executives at the fund, would have generated UniSuper a tax credit in the tens of millions of dollars. However, the KPMG partner told the board in 2024 the strategy was high-risk and unlikely to be accepted by the Australian Taxation Office, according to sources close to the matter, who requested anonymity to discuss confidential internal affairs.
KPMG has been engulfed in a scandal after a whistleblower alleged that the firm’s auditors misused client data from some of the country’s biggest companies. Harry Afentoglou
Aggressive manoeuvring on tax is unusual for the major superannuation funds, which are largely risk-averse and, for industry-aligned funds such as UniSuper, run on a not-for-profit basis. UniSuper is one of the country’s biggest retirement funds, managing $150 billion for more than 720,000 members.
The allegation that KPMG replaced a partner who had given conservative tax advice raises questions about the way the firm might adjust its advice to suit client needs rather than regulatory requirements.
KPMG has been engulfed in a scandal after a whistleblower alleged that the firm’s auditors misused client data from some of the country’s biggest companies, including Lendlease, Dexus and Optus, and had used insider information to win auditing work.
The scandal has already claimed the scalps of many senior executives, including chief executive Andrew Yates, chairman Martin Sheppard and three senior auditors – Eileen Hoggett, Paul Rogers and Julian McPherson – after the whistleblower’s concerns were made public after being read into federal parliament by Labor senator Deborah O’Neill in March.
Former KPMG CEO Andrew Yates, former head of audit Julian McPherson, former chief operating officer Eileen Hoggett and former chairman Martin Sheppard.
Assistant Treasurer Daniel Mulino has raised potentially moving regulation of the big four firms to the Australian Securities and Investments Commission, rather than the current mix of federal and state-based bodies, to toughen up policing of the sector.
The issue last week spread to the Westpac board when director Peter Nash, a former KPMG chairman, quit because his connection to the under-fire firm created a “perception of bias”.
Former SBS boss and Telstra executive Michael Ebeid has been appointed the new independent chair of KPMG Australia, but he is now facing scrutiny over a chain of emails in which he accused O’Neill of making false statements..
The UniSuper transaction is understood to have revolved around one of the fund’s flagship retail property investments: the Karrinyup Shopping Centre in the western suburbs of Perth.
UniSuper has owned a portion of the mall since the early 2000s, and steadily ratcheted up its control before taking full ownership of the centre in 2013 following a High Court battle with its co-owner Westfield.
Former KPMG chairman Peter Nash. Daniel Munoz
Because of this move, the fund’s ownership of Karrinyup was held across many structures. The intercompany deal – dubbed internally as the “Highlander transaction” after one of the entities – would have consolidated the ownership, and generated an artificial loss to create the controversial tax credit.
UniSuper disclosed the proposed transaction to the ATO during one of the regulator’s combined assurance reviews – a regular assessment of the nation’s top 1000 taxpayers to ensure they are paying the right amount of tax.
The KPMG partner had advised the fund’s board, led by chairman Greg Armour, against the transaction in an August 2024 board meeting.
It’s alleged the partner was removed from the UniSuper account following complaints from executives the next month, sources said, although it is understood the fund had other issues with the partner in question. The partner has since left KPMG and declined to comment when approached. The Australian Financial Review has chosen not to name him.
UniSuper said this was a matter for the ATO and that it was “not appropriate for us to comment further”. The ATO’s review was completed in March 2025.
“KPMG has been and remains UniSuper’s registered tax agent for over 10 years, and it’s not uncommon for partners to change over time,” a UniSuper spokesman said.
KPMG declined to comment.