PwC plans to exit all government advisory work, divesting to Allegro Funds after tax leak scandal

The Big Four consulting firm on Sunday announced it would aim to sign a binding agreement with Allegro Funds by the end of July, at the same time it revealed Kevin Burrowes would be appointed as chief executive officer.

Government work accounted for 20 per cent of PwC's revenue in the 2023 financial year, and will impact its future size and operations, the firm said in a statement.

Around 130 PwC partners and up to 2000 employees would move across to the new business, known as Project Bell.

But the move will ensure stability for the rest of its clients, and mark "a new direction for PwC Australia".

"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 c.1,750 talented people in our government business," PwC Australia's board chair Justin Carroll said in a statement.

"This transaction will result in the first pure play, at scale, [of] government business in the market.

"This was an extremely difficult decision, but we are determined to take all necessary steps to protect the jobs of our people and re-earn the trust of our stakeholders."

PwC Australia has been the subject of scrutiny since January, when the Tax Practitioner's Board banned then-head of international tax, Peter-John Collins, from practicing as a tax agent for two years.

An investigation found Mr Collins had shared confidential information on Australia's multinational tax avoidance strategy, after a confidential Treasury consultation.

In May, emails tabled in Parliament revealed the extent of information sharing, prompting Treasury to refer the matter to the Australian Federal Police to consider the commencement of a criminal investigation.

The emails include the redacted names of 63 people who received the confidential information. Pressure has been mounting on the firm to release the identities of those people, but Ms Stubbins has previously said the "vast majority" named in the redacted emails were not involved in any wrongdoing.

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Labor senator Deborah O'Neill, a member of a Senate committee inquiring into consulting services, said PwC's move was "putting profit ahead of truth-telling", with questions about the firm's actions and culture still unanswered.

"Now more than ever it is vitally important that PwC immediately release the names, and detail the involvement of all partners and staff in this scandal," she said.

PwC has provided the Senate committee a list of the 63 names, but not the unredacted version of the emails, which would clarify individuals' roles in receiving or sharing information.

"Real contagion risks remains. It is beyond plausible that PwC Global/Oz think they can just phoenix their way out of the deep cultural failures that are a matter of record and remain unresolved," she said.

"More of the same with a new name is still more of the same."

The PwC Network's Global Clients & Industries leader Kevin Burrowes will also step into the role of chief executive officer, taking over from acting chief executive officer Kristin Stubbins.

Mr Carroll thanked Ms Stubbins for "leading the firm during this challenging period marked by rapid change".

Mr Burrowes will focus on enhancing the firm's culture, focusing on ethics and controls, the firm's statement read.

"Under past leadership, PwC Australia failed to meet the Network's Code of Conduct and uphold the Network's professional standards and values," Mr Carroll said.

"Its past actions are not representative of the work and behaviours of PwC around the world and I am deeply sorry to our clients, our broader stakeholders and our people.

"PwC Australia has significant work to do and I am confident that the steps they are taking with the Network's support will result in a stronger firm."

The firm has placed nine of its partners on leave and initiated its own independent review of culture and standards, led by Dr Ziggy Switkowski, and due to be published in September. These steps have been taken "to enhance its governance, culture and accountability", its statement read.

In its statement, it reiterated PwC's clients were not involved in any wrongdoing and no confidential information was used to enable clients to pay less tax.