PwC has completed the sale of its government business components and all bar eight senior managers have retained their positions. Photo: David Murtagh.
PwC Australia’s sale of its government advisory arm to Allegro Funds is complete, creating a new firm called Scyne Advisory.
The sale is part of the fallout of PricewaterhouseCoopers’ massive breach of trust in leaking confidential Treasury information and using it for its own commercial benefit.
The incident is the subject of an Australian Federal Police investigation, as well as ongoing parliamentary inquiries and a referral to the newly created National Anti-Corruption Commission.
PwC decided to sell its government business components – at state and federal levels – to be seen acting to make up for its actions while keeping 1750 of its employees in a job.
The sale has already sparked suggestions from some Labor and Greens senators that it might simply be a case of “phoenixing”, whereby a company in trouble is liquidated, wound up or abandoned, only to reemerge with the same directors and staff.
On Monday (3 July), however, PwC Australia named and sacked eight of the senior partners involved in the matter.
It was a scandal that saw a secret scheme developed to show PwC’s multinational clients how to avoid paying the very taxes PwC was helping the government implement.
It was a betrayal of the Australian Government at a serious level.
The firm’s former chief executive officer Tom Seymour, who had already stepped down, was among the eight to have lost their jobs, as was Sean Gregory.
Region first reported on Gregory bragging to an executive dinner gathering about how close he was to Treasurer Jim Chalmers while the Treasurer was seated beside him.
The other PwC executives to go are Pete Calleja, Peter van Dongen, Peter Konidaris, Wayne Plummer, Richard Gregg and Eddy Moussa.
Allegro Funds has bought PwC’s government advisory business for $1.
That arm of the business held contracts worth $255 million last year.
In a statement issued on Tuesday (4 July), Allegro said terms of the PwC sale were complete, effective from last Saturday (1 July), and an operational start was set for August.
“The new business will be fully independent of PwC with around 1750 employees overall,” the statement said.
“The new business will be known as Scyne Advisory. Allegro will acquire the business for $1 and expects to commit more than $100 million to support the business in the future.
“The funds will support employment and operational costs during the transition, making the necessary investments in people and systems.
“Scyne Advisory will establish an independent board of directors to oversee a rigorous ASX standard of governance and integrity in the business.”
Andrew Greenwood, who served as a judge in the Federal Court of Australia for 17 years, has agreed to join Scyne’s advisory board as a non-executive director.
Candidates for an independent chair and further non-executive directors are currently being interviewed.
According to Allegro, Scyne Advisory will only advise the public sector – a move it hopes will send a clear signal it will avoid conflicts of interest.
Members of the leadership teams of PwC’s Government Health Infrastructure and Defence and its Trust and Risk practices will lead Scyne Advisory in the short term.
“Allegro’s highly experienced operating partners will support this interim leadership team to transition partners and employees to Scyne Advisory, and set up new, independent systems,” the statement says.
“This will allow current public sector client work to continue uninterrupted through the transition. The transaction is targeted to complete by the end of August.”
Scyne Advisory partners Tim Jackson and Ben Neal said that client needs would be “paramount” and that “restoring those clients’ trust” was their number one priority.
“We have a once-in-a-generation opportunity to lead the change required in government advisory in Australia,” they said.
“The DNA of our people is solving complex problems impacting the public sector.
“Governments throughout Australia are assisted on a daily basis by external advisers, which play a meaningful role in the ecosystem of policy development and service delivery.”
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