KPMG chairman, partners to exit scandal-tainted firm
KPMG Australia’s chairman is stepping down and two partners are leaving the firm following a shocking parliamentary hearing and allegations of misconduct at the major consultancy.
National chairman Martin Sheppard will leave the firm shortly, along with audit partners Paul Rogers and Eileen Hoggett.
Mr Rogers and Ms Hoggett were singled out in parliament for allegedly accessing confidential information from long-term audit client Lendlease, along with other KPGM staff, to help them win additional contracts.
A whistleblower has uncovered the alleged misuse, alleging mishandling of documents belonging to Macquarie Group, Westpac, Dexus and Optus.
Several senior KMPG employees, including former CEO Andrew Yates, have resigned over the scandal, which was the subject of a blockbuster hearing on Friday that included harsh criticism of the company.
Stan Stavros, KPGM’s interim chief executive, said: “The parliamentary committee’s investigations have uncovered issues including unethical behavior by senior staff and the humanitarian impact of KPMG’s handling of the whistleblower.”
“KPMG Australia is focused on ensuring these failures are understood, addressed and not repeated.”
Mr Sheppard was angered by senators at the committee hearing over his firm’s initial refusal to hand over internal documents, citing confidentiality, professional privilege and the risk of impairing the administration of justice.
Committee chairwoman Deborah O’Neill described the move as an insult and stated that KPMG could be investigated for defamation.
The consulting firm later relented and began producing materials for the committee.
KPMG said on Tuesday it would overhaul its governance arrangements, including appointing its first independent chairman and independent members to its Australian board.
The firm will also review and update the board’s role and mandate and appoint new independent board members in priority areas such as audit quality, ethics, whistleblower oversight and other matters of public interest.
An external third party will be appointed to promptly review lessons learned regarding the whistleblowing matter.
“The decisions announced today are necessary and urgent,” Mr. Stavros said in a statement. he said.
“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.
“Trust can only be rebuilt through sustained action and demonstrable change. We are determined to confront what went wrong, act transparently and ensure these failures are not repeated.”
