She told parliament she had “taken great care to verify, via documentation, the authenticity of the matters I am putting on record here in the Senate of the Australian Parliament tonight” but did not provide details of this evidence.
KPMG Australia’s leaders said the firm had already commissioned two separate law firms to investigate the claims but were “unable to substantiate any claims of wrongdoing” and the complainant had failed on 20 occasions to provide further evidence to back up the allegations.
Five major allegations
Senator O’Neill outlined five major whistleblower allegations under parliamentary privilege. No dates were provided for the allegations.
The first involved “confidential Lendlease board papers” being “taken and circulated internally within KPMG and used to support pursuit of major audit tenders including Westpac and Dexus,” O’Neill said.
The whistleblower alleged that the documents were taken by senior executives and secured in one partner’s locker. KPMG has audited Lendlease since 1958, well beyond what is considered good corporate practice.
The second allegation claimed “improper access” to Telstra information.
“KPMG personnel offered access to restricted documents from Telstra’s IT environment, via a Telstra-issued laptop,” O’Neil quoted the whistleblower as alleging. “These documents related to Telstra AI governance policies and internal practices during a live external audit tender ...”
The third allegation relates to the way the firm won the Macquarie Group audit, the most coveted and valuable auditing contract in the country. The allegation related to the role of KPMG partner-turned-Macquarie director Michelle Hinchliffe in the tender process.
Macquarie’s chairman Glenn Stevens has previously called these allegations “silly talk” and said Hinchliffe was a “highly credentialled, highly esteemed” former partner.
Similar concerns about conflicts of interest in the tender process for Westpac’s $30 million audit contract in 2024 were at the heart of the fourth allegation.
“Throughout the tender, KPMG received feedback of position intelligence not available to competitors. This included that the tender was KPMG’s to lose, commentary undermining EY’s proposed lead partner, guidance to reduce KPMG’s fee by approximately 25 per cent and advice on managing perception optics.”
Rear Window has previously noted the number of ex-KPMG personnel within Westpac, including audit committee chair Peter Nash, chief financial officer Michael Rowland and director Michael Ullmer. There is no suggestion they provided KPMG with any private information, only that the allegation was raised in parliament.
The final allegation referred to KPMG’s late 2024 win of the Dexus external audit from PwC.
“On the sixth of November 2023 a meeting was held at KPMG Barangaroo’s office,” O’Neill, quoting the whistleblower said, “During that meeting ... an arrangement was proposed where one of the people present would leave his laptop open with Dexus internal audit documents visible while he went for lunch, allowing external audit personnel to view them.”
‘No evidence’: KPMG Australia
In a joint statement, KPMG Australia chairman Martin Sheppard and KPMG Australia chief executive Andrew Yates denied the firm was involved in any wrongdoing.
“Almost two years ago, a former employee of KPMG Australia made serious allegations and claims relating to their time at the firm,” they said.
“While there was no evidence provided at the time to support the allegations, we have treated the matter seriously. We commissioned two separate law firms: one to review our firm’s investigation into the claims and one to conduct its own external investigation. On the basis of what we have been provided, we have been unable to substantiate any claims of wrongdoing raised with us.”
The men called the five allegations “new and unsubstantiated” and said that the firm had “requested evidence from the former employee to support the claims on more than 20 occasions and offered multiple pathways for providing information, including via external legal counsel, a whistleblower service, and direct access to KPMG non-executive directors.”
They said KPMG has asked O’Neill to share the evidence relating to allegations she possesses and again invited “the former employee to provide evidence” through the firm’s existing whistleblowing channels.
The firm has also contacted “the clients named in the Senate” and that ASIC was aware of the allegations.
