KPMG chair Martin Sheppard to resign after damning Senate inquiry, scandal
Updated ,first published
KPMG’s chairman Martin Sheppard and two senior partners will leave the firm, the latest leaders to resign after the consultancy handled whistleblower allegations that it misused confidential client information.
Sheppard will be replaced by an independent chairman, while two other senior KPMG partners, Paul Rogers and former COO Eileen Hoggett, will also leave the firm.
Stan Stavros, interim chairman of KPMG Australia, said “the decisions announced today are necessary and urgent”.
“We did not meet the standards expected of us and we recognize the impact this had on the whistleblower, our employees, our customers and the community.”
Sheppard’s appearance before a public Senate committee hearing on Friday was the final straw for KPMG partners watching the firm’s disastrous response to the scandal.
This includes Sheppard being forced to backtrack on his use of legal professional privilege to preserve documents relating to KPMG’s interactions with law firms Ashurst and Allens over the matter.
Rogers and Hoggett were both involved in one of the most serious breaches ever identified: gaining access to confidential Lendlease board documents, including rival bids to audit the company. Lendlease chairman John Gillam called it a “serious abuse of access privileges” on Friday.
Both Rogers and Hoggett had previously been fined by KPMG over the matter. Neither commented as the scandal continued.
Late last month, Sheppard accepted the resignations of chief executive Andrew Yates and head of audit Julian McPherson after KPMG confirmed allegations that confidential client data had been shared and potentially used to win new business with other clients.
But Sheppard has resisted internal and external pressure to take personal responsibility for the firm’s years-long delay in publicly confronting the scandal until now.
Following a searing parliamentary hearing questioning KPMG executives on Friday, Labor senator Deborah O’Neill, who triggered the scandal by revealing damning whistleblower allegations in March, questioned whether the firm’s current leadership team could clean up its culture.
On Monday, a ABC In the interview, O’Neill criticized Sheppard, a former partner at the firm, for continuing to defend the group during Friday’s public senate hearings. He said he had not yet grasped the extent of the company’s failure.
“You had to look at the performance of the leadership team there the other day and wonder what they thought they were doing,” he said. “I don’t think KPMG fully understands the problems they’ve created, and I don’t know if the team is there to clean up this mess.”
The firm spent much of the hearing arguing that it should not have to provide the investigating committee with documents related to investigations into the whistleblower and his allegations. KPMG argued that they were legally protected. But later in the day, Sheppard relented.
Stavros said the committee highlighted issues such as “unethical behavior by senior staff and the human impact of KPMG’s handling of the whistleblower”.
“KPMG Australia is focused on ensuring these failures are understood, addressed and not repeated,” Stavros said in a statement.
Following the hearing, the anonymous whistleblower presented documents about his experiences and claimed KPMG made changes to its employment policies in an attempt to fire him within weeks of his 2024 complaint.
“An individual who makes a protected disclosure and is rejected from the appropriate recipient within two weeks and then receives threats of dismissal is not invited to cooperate,” the whistleblower said in one of his statements released by a Senate committee after the hearing.
Lendlease is preparing to fire its auditor, KPMG, and the federal government has effectively suspended the firm from taking on any further business for several months.
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Colin Kruger is senior business correspondent for the Sydney Morning Herald and The Age newspapers.Connect via email.
