Michael Ebeid’s last-ditch effort to save KPMG, and himself
The timing of the wannabe chair’s mea culpa suggests he’s sorry he got caught, rather than being sorry for what he did
KPMG’s half-hearted disclosures skewed Ashurst review of misconduct
KPMG withheld crucial information from Ashurst as the law firm conducted a review related to allegations of misconduct in the accounting firm’s audit division, leading the lawyers to dismiss the whistleblower’s right to claim legal protection.
A report authored by Ashurst in May last year said KPMG had told the law firm that the whistleblower had only provided “high-level information” about the allegations. This prompted Ashurst to find that he had not provided sufficient detail for his claims to qualify as protected disclosures.
The KPMG head office in Barangaroo, Sydney. The firm has been in crisis for weeks, after it dismissed whistleblower claims about wrongdoing that it ultimately said were true. Natalie Boog
In reality, however, KPMG already had enough information from the whistleblower to undertake an investigation into the allegations and to recommend partners be fined for misconduct in relation to them soon after.
Ashurst based its assessment solely on “file notes of discussion between KPMG and [the whistleblower]”, an email where the whistleblower threatened to disclose the claims to authorities, and the assurance that an internal probe concluded the allegations were “false and misleading”.
The Ashurst report, and findings about the same matter by lawyers at Allens in December, were published on Monday by a parliamentary committee examining the matter. The Allens report was also focused on whether the whistleblower was entitled to legal protection regarding certain disclosures.
The committee said that it realised “the seriousness of its decision to publish these documents”, as KPMG had claimed legal privilege over them, and that it did “not do so lightly”.
“However, it is necessary to enable a public examination of both KPMG’s response to the serious allegations made by the whistleblower and KPMG’s characterisation of that response in statements to this committee, its clients and the Australian public,” it said.
The committee added that it had “provided KPMG with every opportunity to publish the documents itself”, but the firm had “chosen not to”.
Ashurst’s lawyers were not told that six months earlier, in November 2024, KPMG had secretly accessed the whistleblower’s computer at least twice and downloaded documents detailing more than 15 separate complaints involving multiple named clients.
That information was detailed enough to allow an internal disciplinary panel at the firm to issue fines to three partners for misusing confidential information provided by Lendlease.
KPMG’s reliance on law firms to provide legal cover and to avoid investigating whistleblower complaints is at the heart of the scandal which has claimed much of its leadership over the past month.
The former employee agreed to leave the firm on the understanding that his claims would be properly investigated, but they were dismissed instead.
The firm launched a comprehensive investigation after the allegations – that partners had accessed the confidential files of clients for inappropriate reasons – were raised by Labor senator Deborah O’Neill in March.
The reports show that KPMG provided such limited information to Ashurst that the law firm concluded that the firm could not investigate the whistleblower’s claims due to a lack of detail, and accepted that the auditing giant had reviewed the allegations and found them to be false.
Ashurst lawyers wrote that there would be no “easy way to finalise this matter and put an end to [the whistleblower’s] incessant communications”.
The Ashurst report dated May last year is one of five that KPMG commissioned into aspects of the whistleblower’s complaints.
The report commissioned by Allens and provided in December, meanwhile, advised KPMG that while most of the disclosures it reviewed would not qualify for protection under whistleblower laws, there was “some risk that a court may find that at least some” would. The lawyers said that even if this were the case, KPMG had not breached those protections.
Another report provided by Ashurst treated the complaints as a workplace complaint and concluded “no further action is required by KPMG”, while an yet another review flagged that aspects of the most serious allegation, relating to the use of Lendlease information, may have been true.
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Law firm Allens cleared KPMG partners of whistleblower allegations before reckoning
KPMG’s chairman-elect Michael Ebeid has issued a grovelling apology for dismissing allegations from a whistleblower that have rocked the consultancy as he fights to win his job on a permanent basis.
And in a bigger issue for the consultancy, documents released by parliament on Monday showed that two major law firms that reviewed the whistleblower’s claims early in the saga failed to take basic steps, such as interviewing people involved or checking staff emails.
But in March, Ebeid had emailed his colleagues on the KPMG board accusing Labor’s Senator Deborah O’Neill of airing “completely false” allegations when she read out the whistleblower’s claims that top staff at the firm had misused confidential client information. Those allegations have since been substantiated.
Ebeid, who has essentially been functioning as the chairman of the firm that is trying to recover from its top executives’ misuse of clients’ confidential audit documents, needs to get the backing of KPMG partners in a vote that concludes on Wednesday.
On Monday, documents released by O’Neill’s parliamentary committee, which is investigating the scandal, revealed Ebeid’s personal apology to O’Neill for the March email.
“What I wrote was wrong,” Ebeid told O’Neill on Saturday, according to one document. “I described statements about the whistleblower’s allegations made by you to the Senate as false. I described the firm’s process as thorough. Events since have shown that neither was true, and that the concerns you raised on the whistleblower’s behalf have helped uncover serious wrongdoing and I can only thank you for that.”
He said he thought he was being helpful, based on his knowledge at the time. “However, with what I know now, my email was naive, embarrassing and wrong on every level,” Ebeid wrote.
And in a fresh issue for the embattled firm, the committee also released documents that KPMG had battled to keep hidden under claims of legal professional privilege. The committee said it was in the public interest to release these documents ahead of another public grilling this Friday.
The legal documents were the reports from two law firms, Allens and Ashurst, and relate to their work on the whistleblower complaints. KPMG had initially used the reports from the law firms to claim that the whistleblower’s complaints were unsubstantiated while refusing to make the actual documents public.
A fresh investigation by Allens has led to a purge of KPMG’s most senior people as some of the most serious allegations have now been substantiated.
“The Ashurst and Allens processes were central to the claim that KPMG had undertaken comprehensive internal and external investigations prior to the speech given by Senator Deborah O’Neill on 24 March 2026,” the committee – chaired by O’Neill – said in a statement.
It said the committee had found there was a “compelling public interest” in examining the results of the law firms’ investigations at its next hearing, allowing it to publish the previously legally privileged documents.
KPMG’s new chief executive John Sams told partners that the parliamentary committee informed the firm of its intentions to publish the documents on Friday.
“We acknowledged the Committee’s role and the importance of scrutiny and transparency, while noting that the reports reflect a point in time and do not correctly represent the current status of the investigations,” he said.
One of the documents was a report submitted to KPMG in December last year by Allens that said all the whistleblower’s allegations were unsubstantiated.
This includes the claim that KPMG’s Lendlease audit team stole confidential board papers and shared them internally to help win multimillion-dollar external audit tenders for Westpac and Dexus.
Given the credibility of the KPMG executives involved, Allens said it was “disproportionate and unnecessary” to search staff emails to check what they had said was correct.
A subsequent investigation by Allens confirmed that senior partners had illicitly accessed sensitive Lendlease board documents and kept them in a work locker, and led to the immediate expulsion of former chief operating officer Eileen Hoggett.
Another document released was an Ashurst report from February last year. At the committee’s public hearing last month the law firm described its work for KPMG as legal advice.
This report also cleared KPMG personnel of any wrongdoing “based on the material reviewed”, but the report contained a significant caveat. “In coming to these conclusions we have not had the benefit of speaking directly to any of the individuals concerned and assessing their credibility,” Ashurst’s lawyers wrote.
Ashurst and Allens, two of Australia’s largest law firms, declined to comment.
Since May, the firm has lost its chief executive Andrew Yates, chairman Martin Sheppard, and Hoggett after she lied the board documents.
KPMG audit partner Kim Lawry also resigned from her senior roles last month after Westpac requested that she be removed from its audit “to ensure there is no distraction”.
KPMG independent board member Patty Akopiantz quietly left the firm’s regional board last month, following former NSW premier Mike Baird’s exit in September, and fellow independent director Jane Hemstritch is expected to resign once replacements have been found.
