PwC boss “deceptive” over secret $1.2m payments

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ANTHONY KLAN

The CEO of PwC Australia parachuted into the role after the tax leaks scandal failed to disclose to the firm’s hundreds of Australian partners he was being paid $1.2 million a year from PwC International.

Kevin Burrowes has admitted to a Senate inquiry he failed to provide transparency to PwC Australia’s partners over the payments — 30 per cent of his salary — which only became public in response to Senate questions a year later.

At the heart of the scandal is a top-level report into the tax leaks matter internationally by law firm Linklaters which Burrowes claims he cannot access — because PwC International is refusing to hand it over.

Burrowes told the Parliamentary Joint Committee on Corporations and Financial Services in February his salary was $2.4m a year — which he later corrected to $2.8m — but it later emerged he was also paid a further $1.2m by PwC International.

The inquiry this morning heard PwC Australia’s partners – and its chief ethics leader Jan McCahey — was not told of the $1.2m extra salary from PwC International.

McCahey said she only became aware of it just weeks ago on June 20 — almost a year after Burrowes was appointed PwC Australia CEO in July last year — and in response to repeated questions from the Senate inquiry.

“Burrowes is paid $100,000 a month by PwC International”

The $1.2m was only known by “select partners on the governance board” and was “kept secret for nearly a year”, the inquiry heard.

ALP Senator Deborah O’Neill said Burrowes being “paid by two masters” presented a “very high level of conflict of interest” and was also “deceptive”.

O’Neill asked Burrowes: “You have not provided transparency to your own board?”

Burrowes responded: “I am happy to do so Senator”.

Kevin Burrowes fronts the inquiry this morning. Source: Australian Senate

Under questioning McCahey told the inquiry this morning she had not been aware of the $1.2m until June 20.

That was despite having giving evidence alongside Burrowes before the Senate inquiry in February when he was asked about his salary.

“It concerns me greatly that Ms McCahey, your own chief ethics advisor, as she sat beside you giving evidence here that she was not aware of the $1.2m that you were receiving from PwC International,” O’Neill told Burrowes.

Burrowes said that when asked about his salary he thought the Senate was asking only about PwC Australia, which is why he didn’t mention the $1.2m.

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The tax office says PWC is deliberately hiding the Linklaters report. Source: The Klaxon

McCahey told the inquiry she was “surprised to learn” of the $1.2m.

“I wasn’t aware of it as you say, I was surprised to learn of it at the time,” McCahey said.

O’Neill asked how she had become aware of the “deception” by Burrowes.

“I was in discussion with Mr Burrowes on the 20^th of June this year,” McCahey responded.

At that time PwC was responding to repeated  “questions on notice” from the Senate inquiry, O’Neill said.

“So just shy of a year later, Ms McCahey, you find out that ‘oops, there’s another $1.2m down the back of the couch’ that any ordinary person would perceive as a conflict of interest?” O’Neill said.

McCahey responded: “In this case the discussions were held at the governance board level which doesn’t include me”.

The $1.2m annual payments to Burrowes — which he said were paid at “$100,000” a month — mean he is being paid by the same entity which he claims is refusing to hand over the Linklaters report.

It was “intolerable” that PwC had not handed over the report, O’Neill said.

Burrowes said he had “made several requests” for the Linklaters report but it “wasn’t mine to provide”.

“I don’t believe it’s pertinent,” he added.

O’Neill said the report was “extremely important”.

“Your decision to accept a payment from two masters is replete with a conflict of interest. I can’t see why you don’t see that,” she said.

Before becoming PwC Australia CEO Burrowes was a partner of the firm’s UK operations in a number of senior roles.

The hearing continues.

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