SYDNEY (Reuters) – PricewaterhouseCoopers Australia on Sunday entered into an exclusive agreement with private equity firm Allegro Funds to sell its government practices for A$1, bringing in a CEO from Singapore to lead its homegrown firm through the fallout from a national scandal. .
The scandal, which broke in January, revolved around a former PwC tax partner who advised the federal government on laws to prevent corporate tax evasion and shared confidential information with colleagues who then used it to pitch multinationals for business.
Amid growing backlash from key government clients, PwC said it has entered into an exclusive agreement to divest its federal and state government businesses to Allegro Funds for A$1 ($0.67) as first reported on Friday.
A professional services firm said statement on its website.
If the deal goes through, Allegro will establish the new company as a corporation, rather than as a partnership, according to the source who was not authorized to speak to the media. Ownership will be split between Allegro and the former PwC partners, the source said, though the exact division was not known.
An Allegro Funds spokesperson declined to comment.
PricewaterhouseCoopers said the divestment accounted for about 20% of revenue for the 2023 fiscal year. The company made A$3 billion ($2 billion) in revenue in the last financial year.
“We have taken this step because it is the right thing to do for our public sector clients and to protect the jobs of the 1,750 talented people in our government business,” said Justin Carroll, Chairman of PricewaterhouseCoopers Australia.
The deal attempts to isolate the company’s government consulting business and rebuild trust with several departments and agencies that have frozen the company from new work.
Labor Sen. Deborah O’Neill, who helped release a cache of internal PricewaterhouseCoopers emails last month, said the company cannot “get out of the way” until it discloses full details of those involved in the breach of confidential document.
“More of the same with the new name is still more of the same,” she said in a statement.
The new CEO
PwC global chairman Bob Moritz publicly apologized in a statement and said PwC Australia had failed to live up to the company’s standards and values under previous leadership.
Kevin Burrows, currently the Global Customers and Industries Leader based in Singapore, will become CEO and take over the role once he relocates to Sydney.
Acting CEO Christine Stebbins will remain in the role until Burrows arrives.
“PricewaterhouseCoopers Australia has great work to do and I am confident that the steps it is taking … will lead to a stronger company,” Moritz said.
($1 = 1.4977 Australian dollars)
(Reporting by Louis Jackson and Sam McKeith). Editing by Christopher Cushing and Tom Hogg
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Reports on breaking news in Australia and New Zealand covering top stories across politics, companies and commodities. He previously wrote about stocks at Morningstar.
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