Australia’s biggest pension fund freezes new business with PwC over tax scandal
Australia’s largest superannuation fund has said it will not sign any new contracts with PwC as the consulting firm grapples with the fallout from a tax scandal in one of its biggest markets.
AustralianSuper, which has almost 3mn members and A$290bn ($191bn) of assets under management, said on Friday that it would freeze any new work with the Big Four firm and review an audit contract later this year.
“AustralianSuper is concerned with the ongoing revelations around PwC and as a result has frozen any new contracts with PwC,” said a spokesperson for the fund. AustralianSuper had expressed those concerns “at the highest level” to PwC last week, he added.
PwC has been under intense public scrutiny over the past month after the release of emails showing it had used confidential information about changes to tax laws from the government to win new business.
It suspended nine partners this week pending the outcome of an investigation in September as it moved to ease the impact of a scandal that has engulfed its Australian and international operations.
An increasing number of companies in Australia, one of PwC’s largest markets, are reviewing their relationship with the consultant following the confidentiality breach.
AustralianSuper is the latest organisation to put restrictions on PwC following the scandal. The Reserve Bank of Australia said on Wednesday it would not give new business to the firm pending the outcome of the review. Treasury officials have also said the ethical behaviour of consultants would now need to be taken into account when procuring new contracts.
AustralianSuper, which is partly owned by the Australian Council of Trade Unions, said it spent more than A$2mn with PwC last year.
PwC’s management will appear in front of the senate in Canberra next week to answer questions over the scandal. The firm is expected to come under more pressure to release the names of the partners involved in the use of the confidential information and any clients that benefited from the tax advice.
The government, which has referred the matter to the police to consider criminal action, has said the onus is on PwC to convince it that the company’s internal review and the resignation of any partners involved in the scandal are sufficient redress for it to resume working with the public sector.