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The Guardian - AU
The Guardian - AU
Henry Belot

‘Deadly serious’: Australian regulators criticise PwC refusal to hand over report into tax leaks

CEO of PwC Australia, Kevin Burrowes
CEO of PwC Australia Kevin Burrowes told the hearing he had repeatedly sought a copy of the report from the firm’s international executive but was denied on each occasion. Photograph: Lukas Coch/AAP

PwC has faced furious rebuke from politicians, the country’s tax office and a regulator for repeatedly refusing to share a report it used to argue that a damaging tax leaks scandal was isolated to Australia.

The report, by law firm Linklaters, was cited by PwC’s global executive to assure regulators there was no evidence that confidential details about multinational tax laws received by the firm’s international partners were used for commercial gain.

The report was commissioned after a former PwC partner, who was advising the Australian government on the draft laws, shared confidential information with his colleagues over several years. That information was then sold to tech companies in the US, giving them time to prepare them for new, tougher laws.

After being criticised by “furious” ministers and referred to the Australian federal police, PwC cited the report to assure regulators its global partners did not commercialise the government secrets.

PwC’s global executive also said the report found six partners outside Australia should have raised questions about whether a colleague was providing them with government secrets.

Australian senators and regulators want to know who those six partners are.

The chair of a parliamentary inquiry into the scandal that saw PwC Australia divest its entire government consulting division for just $1, Liberal senator Richard Colbeck, said the firm’s refusal to share the report was unacceptable.

Colbeck, who has previously sought the assistance of parliamentary oversight bodies in the US and the UK to obtain the report, said Australians deserved to know who “the dirty six” were and that the firm’s non-disclosure would be formally condemned by the Australian Senate.

“If we don’t see the report, it ain’t going to be pretty,” Colbeck told the inquiry. “We are deadly serious about this. Deadly serious.”

PwC Australia’s chief executive, Kevin Burrowes, said he had repeatedly sought a copy of the report from the firm’s international executive but was denied on each occasion.

“I’ve formally requested the Linklaters report again from PwC International Limited and that request was refused on the basis that the information contained in that report is privileged and confidential to PwC International Limited,” Burrowes told the inquiry, before apologising.

Burrowes has been unable to tell the inquiry the names or locations of the international partners investigated by Linklaters.

The Australian Tax Office (ATO), which has repeatedly expressed frustration about PwC Australia’s use of legal professional privilege claims to stymie its investigations, has not seen a copy of the report. An ATO deputy commissioner, Rebecca Saint, indicated the matter was being discussed with international partners.

“There is a great deal of interest in what has happened in Australia, internationally,” Saint told the inquiry.

“There is absolutely a lot of interest. We have certainly been working closely with others.”

The ATO’s second commissioner, Jeremy Hirschorn, said the firm was being obstructive.

“We share the frustrations of this committee that an organisation, which claims to be cooperative, is deliberately hiding behind the difference between their local firm and the international firm,” Hirschorn told the inquiry.

The regulator that exposed the scandal, the Tax Practitioners Board, has repeatedly requested the document to inform its investigation of PwC Australia. The TPB has nine ongoing inquiries into the firm.

“We have asked for the report and the response we got was, ‘PwC Australia don’t have a copy of it and are not able to give it to us’. I would have appreciated a copy of it, quite clearly,” said the TPB’s chair, Peter de Clure.

The Greens senator Barbara Pocock told the inquiry that PwC’s refusal to provide the report was “a running sore of dishonesty”.

“PwC is disdaining the parliament, that is what you are doing,” Pocock said.

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