Ed. note: On May 15, 2023, one week after former CEO Tom Seymour vacated his role, PwC announced he will retire on September 30.
While most of us were sleeping, PwC Australia was starting its Monday minus one CEO. Tom Seymour has stepped down following a board of partners discussion after it was revealed last week he was one of several partners who received confidential government intel that was then used to advise clients on tax matters. “We have agreed with Tom that it is in the best interests of the firm and our stakeholders,” said PwC in a statement.
We haven’t written much about the PwC tax leak, first brought into the spotlight by Australian Financial Review back in January, other than a few passing mentions in linkwraps so you may need a little catching up. The TL;DR is international tax leader Peter Collins — who was named corporate tax adviser of the year by the Tax Institute of Australia in 2016 — shared confidential information he received from tax authorities about plans to push out new tax avoidance laws with PwC partners and clients. As a result of the violation, he ended up banned from practice for two years by the Tax Practitioners Board.
This is from the Tax Practitioners Board’s January 23 news release:
The TPB conducted an investigation into Mr Collins’ conduct. The investigation revealed Mr Collins, while a partner of PwC, was part of a confidential consultation by Treasury in a confidential consultation to improve tax laws. This included new rules to stop multinationals avoiding tax by shifting profits from Australia to tax and secrecy havens. Mr Collins made unauthorised disclosures of this confidential law reform information to partners and staff of PwC.
The TPB found Mr Collins failed to act with integrity, as required under his professional, ethical, and legal obligations, and terminated his tax agent registration.
In addition, the TPB investigation determined that PwC had failed to properly manage conflicts of interest, when this confidential law reform information was shared with partners and staff in their tax practice. PwC breached its obligations under the law and the Code of Professional Conduct. The TPB ordered PwC to have processes and training in place to ensure conflicts of interest are adequately managed.
Documents released March 10 by the Treasurer under Freedom of Information relating to the PwC tax leak [PDF] explain the exact details of Collins’ access to confidential information.
Peter Collins was a member of the BEPS Tax Advisory Group: a targeted consultation group established by Treasury in late 2013 to discuss confidential policy and technical issues arising from the OECD/G20 Base Erosion and Profit Shifting (BEPS) initiative. It included Treasury and ATO officials, tax practitioners and industry and peak body representatives familiar with international tax issues. Around 12 to 15 non-government participants were involved. The Group first met in November 2013 and last met in June 2017.
The Group provided input that contributed to Australia’s implementation of various BEPS measures designed to prevent multinational tax avoidance.
In addition, some of the members of the Group, including Mr Collins, were involved in separate targeted and confidential Treasury consultations on developing Australia’s Multinational Anti-avoidance Law and Diverted Profits Tax legislation (two unilateral measures aimed at addressing multinational tax avoidance).
In respect of the BoT, Mr Collins participated in a number of consultation sessions regarding the BEPS initiatives.
The confidentiality agreement as of 2022 looks a little something like this. You’ll note it specifically says the agreement does not extend to an individual’s organization:
This recent AFR story explains how PwC then leveraged the info Collins was supposed to keep to himself to advise clients who might be interested to know new tax haven rules were coming down the pipe. Heavily redacted internal emails released Tuesday by the Tax Practitioners Board (TPB) use words like “brand-defining” to describe the business opportunity presented by Collins’ early access to this info. “We got this outcome because … we were aggressive in telling these relationships they needed to act early (heavily helped by the accuracy of the intelligence that Peter Collins was able to supply us, and our analysis of the politics),” reads one email written by a partner. “In total, we expect (based on fee estimates that we have agreed with clients) that revenue from this first stage of the MAAL projects will be approximately $2.5 million.”
In addition to Collins’ two-year ban and sanctions against PwC, the leak led to government inquiries, calls for PwC to be barred completely from government work, and of course calls for PwC Australia CEO Tom Seymour to step down. On Friday, Seymour admitted that he had in fact received naughty emails discussing how PwC could use this information to advise clients.
On Friday afternoon, after months of stonewalling questions about what he knew about the leaks of government documents, while PwC privately briefed that none of the senior leadership knew about it, Seymour confirmed in a partners’ meeting what had become increasingly obvious: he was in the emails.
Partners told AFR Weekend that Seymour said only “six to eight” partners actually shared confidential information, but 30 to 40 (including Seymour himself) were on emails where the plans to use the information to market to clients were made.
Seymour has headed up PwC Australia since March 2020. Assurance head Kristin Stubbins will now serve as acting CEO and partners will vote on a permanent appointment in coming months.
The firm hasn’t gotten around to updating his profile yet (archive as of May 8). He will remain at PwC, just not as top dog. See update at the top of the page, he’s outta here.
There’s some funny business going on in InterOil and a lot of it is pure juvenile humor. First of all, you have Louis from Even Stevens pumping their crap stock. Then you have him 