Wednesday, April 17, 2024

PwC hit by new tax row - As Singapore Police Probe Money Laundering Ring, a Private Equity Entrepreneur Disappears

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WS via MSN: “Cindy Picos was dropped by her home insurer last month. The reason: aerial photos of her roof, which her insurer refused to let her see. “I thought they had the wrong house,” said Picos, who lives in northern California. “Our roof is in fine shape.” Her insurer said its images showed her roof had “lived its life expectancy.” 

Picos paid for an independent inspection that found the roof had another 10 years of life. Her insurer declined to reconsider its decision. Across the U.S., insurance companies are using aerial images of homes as a tool to ditch properties seen as higher risk. Nearly every building in the country is being photographed, often without the owner’s knowledge. Companies are deploying drones, manned airplanes and high-altitude balloons to take images of properties. No place is shielded: 

The industry-funded Geospatial Insurance Consortium has an airplane imagery program it says covers 99% of the U.S. population…The array of photos is being sorted by computer models to spy out underwriting no-nos, such as damaged roof shingles, yard debris, overhanging tree branches and undeclared swimming pools or trampolines. 

The red-flagged images are providing insurers with ammunition for nonrenewal notices nationwide. “We’ve seen a dramatic increase across the country in reports from consumers who’ve been dropped by their insurers on the basis of an aerial image,” said Amy Bach, executive director of consumer group United Policyholders. The increasingly sophisticated use of flyby photos comes as home insurers nationwide scramble to “derisk” their property portfolios, dropping less-than-perfect homes in an effort to recover from big underwriting losses. Insurers say that customers agree to home inspections when they buy a policy and that photographing properties from the sky is less intrusive than the home visits used in the past. They say deploying fleets of surveillance planes lets them respond more quickly to disasters and charge rates that better reflect a property’s risk…”

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Treasury correspondence with the Tax Practitioners Board regarding PwC

PwC hit by new tax row fallout

One of the country's biggest consultancy firms has been dumped from an official South Australian contract panel after a national tax scandal.

This has occurred despite assurances the SA practice was not enmeshed in the row.

Embattled “big four” firm PricewaterhouseCoopers, which was embroiled in a confidential information outrage, billed taxpayers almost $4.8m for 11 state government contracts last financial year.

The firm, which is subject of a multi-country Australian Federal Police investigation over the leaks imbroglio, gave paid help to departments, including Premier and Cabinet, Education, Energy and Mining, Attorney-General, as well as Trade and Investment.

It also audited Treasury's internal books, while providing other “checks and balance” advice, along with other external work for SA Health, Renewal SA, Housing Trust, Country Fire Service and office for the Office of the Commissioner for Public Sector Employment.

But amid more scrutiny on consultant firms, PwC has been removed from the state government's preferred audit and financial services supplier panel, meaning it can't be considered for SA taxpayer work.

PwC was forced to sell its government consultancy business - valued at up to $1bn that employed more than 1750 people - for $1 to private equity operator Allegro Funds last year after a former senior tax consultant leaked to clients and partners confidential details obtained in government work.

Up to 30 partners and staff were involved.

In November last year, Scyne Advisory was born from the Allegro fire sale, with 100 PwC staff in SA moving, including Adelaide chief, former Liberal federal minister Jamie Briggs.

Scyne, which employs more than 1000 former PwC staff nationwide, has since successfully tendered for contracts with the Transport Department, SA Health and ReturnToWorkSA.

At the height of the scandal in May last year, Treasurer Stephen Mullighan sought assurances about access to SA government data. He said PwC had assured its SA practice was not tangled in the tax row.

Treasury also demanded “robust” steps at other professional services firms.

Mr Mullighan's spokeswoman revealed “PwC has been removed from the across government Audit and Financial Services supplier panel” in November last year. “Following the split in services, Scyne Advisory has been included in the supplier panel,” she said.

“However (it) cannot provide taxation advice, financial statement audits, or any services requiring an Australian Financial Services Licence.”

Mr Briggs, Scyne's national spokesman, said given the legacy of the business, former Federal Court judge Andrew Greenwood “undertook a rigorous investigation” of every staffer to ensure no scandal link.

PwC Adelaide managing partner Julian McCarthy declined to comment, as did a firm spokeswoman.