Furious KPMG boss expels senior partner over confidential documents in locker
The most serious whistleblower allegation in the KPMG scandal, that senior partners illegally accessed sensitive Lendlease board documents and stored them in a work cupboard, has been substantiated and led to the immediate dismissal of former chief operating officer Eileen Hoggett.
“I can confirm that an ongoing investigation by external law firm Allens has uncovered new evidence supporting the whistleblower’s claim that confidential client information was held in a locker in KPMG’s Sydney office,” a spokesperson for KPMG said.
“(KPMG Australia CEO John Sams) took immediate action to remove a partner from the firm,” the spokesman said, confirming that the person expelled was Hoggett.
“To say I am angry about this would be an understatement. This behavior was completely unacceptable and it is unacceptable that it has taken this long for us to get to this point,” Sams told partners on Friday afternoon.
KPMG said investigations into whistleblower allegations that have thrown the firm into turmoil in recent months are continuing. KPMG has notified affected clients and relevant regulatory and professional bodies.
Hoggett had already resigned due to the scandal but had not yet left the firm. If this had continued, he would have left with a significant retirement benefit expected to exceed a million dollars.
Former KPMG boss Andrew Yates, who resigned in May amid the scandal, received a pension payment of $2.4 million, including $1.7 million in severance pay.
The scandal also led to the resignation of former chairman Martin Sheppard and other partners and is expected to lead to hundreds of staff cuts as clients and the government expect to withdraw business from the firm.
The Lendlease claim was at the heart of the whistleblower’s allegations that senior KPMG staff were sharing blue-chip clients’ data to win new business.
Hoggett has been reached for comment.
Lendlease chairman John Gillam told a parliamentary hearing in June: “Having provided our external auditor with all the normal access they required to Lendlease’s books and records, it is very clear that a fundamental breach of trust has occurred in which our auditor’s access to those books and records has been seriously misused.”
The company is preparing to remove KPMG as its auditor.
This week Macquarie dropped a potential bombshell KPMG scandal, has told shareholders the group is reviewing its ability to deliver on the lucrative Macquarie audit tender it won last year as the embattled firm left the country amid the departure of senior staff in the scandal.
Macquarie also launched an external review of KPMG’s pursuit of the $69 million contract last year.
“The Board has made formal investigations into KPMG and these investigations have included an assessment of KPMG’s ongoing ability and capacity to perform the audit given the departure of some individuals from the firm, as well as an assessment of KPMG’s integrity in following our audit tender process,” Stevens said.
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Colin Kruger is senior business correspondent for the Sydney Morning Herald and The Age newspapers.Connect via email.
