PwC Australia public sector business to become Scyne Advisory

The new business will be known as Scyne Advisory, and will result in the transfer of about 130 former PwC partners and 1750 staff, though the parties say it will be fully independent of the Big Four firm.

Scyne Advisory will only advise the public sector and its agencies, but politicians and experts remain concerned about potential conflicts of interest.

Allegro Funds announced it had signed a binding deal with PwC on the sale of the business on Tuesday, with the transaction to have an effective date of July 1.

"Scyne Advisory and PwC are engaging with governments to transition and re-establish the new business' position on procurement panels," its statement on Tuesday read.

The private equity investor expects to invest more than $100 million into the new business.

The Department of Finance has said it will "carefully consider the implications of these changes for existing and future contracting arrangements".

PwC Australia's acting chief executive officer Kristin Stubbins said parties would aim to wrap up talks by the end of August.

"This next step in the process of the divestiture will provide clarity for our people and our government clients.

"We will work quickly with Allegro to conclude the transaction by the end of August, while at the same time focusing on providing stability for our clients and staff in our corporate and private sector business."

The move follows a decision by the Tax Practitioner's Board to ban PwC Australia's former head of international tax Peter-John Collins from practicing as a tax agent for two years.

Mr Collins allegedly shared confidential information on Australia's multinational tax avoidance strategy with staff at the firm, after a confidential Treasury consultation.

Emails tabled in Parliament in May revealed 63 people had received the confidential information, prompting Treasury to refer the matter to the Australian Federal Police to consider the commencement of a criminal investigation.

Announcing the firm's plans to divest to Allegro Funds in June, PwC Australia's board chair Justin Carroll called it "an extremely difficult decision".

READ MORE: PwC identifies eight partners involved in tax leak

"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."

But Greens senator Barbara Pocock, a member of the Senate committee inquiring into consulting services, said the root issue exposed by the tax leak scandal had not been resolved.

"They would still be providing government services to the people of Australia on a profit-based model rather than a public service model which is what created this mess in the first place," Senator Pocock said in a statement.

"There's no guarantee that the PwC partners and staff won't be taking the poor culture with them to the new entity, including failure to deal with conflicts of interest and ripping off the public purse."

PwC Australia on Monday announced it had removed eight partners for professional or governance breaches, after an investigation into the handling of the confidential Treasury information.

It has initiated its own independent review of culture and standards, led by Dr Ziggy Switkowski, due to be published in September.

The new business will now be responsible for implementing any findings of reviews being conducted by PwC into the tax leak scandal.

Scyne Advisory will establish an independent Board of Directors, with Andrew Greenwood, a former Federal Court judge, to join the board as non-executive director.

Interviews to establish an independent chair and non-executive directors currently are still under way.

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