The long-time chair of the Tax Practitioners Board — who departed immediately before explosive senate hearings into the PwC tax scandal two weeks ago — spent almost a decade working for the same accountancy as disgraced tax practitioner Peter Collins.
The Klaxon can reveal Ian Klug, who as Tax Practitioners Board (TPB) chair oversaw the multi-year investigation into former PwC tax partner Collins, spent “nine years” working for Coopers & Lybrand — now PwC— but failed to disclose the ties.
Klug’s past as a senior tax specialist with Coopers & Lybrand does not appear in Klug’s bio in the Tax Practitioners Board’s annual reports; did not appear in his bio on its website; and does not appear on his extensive LinkedIn resume.
Klug also did not disclose it to the Senate Economics Committee, after ALP Senator Deborah O’Neill asked about PwC links in February.
That’s despite Klug having worked for just two accountancy firms for his entire accounting career — Coopers & Lybrand (now PwC) and Pitcher Partners.
In January Klug announced former PwC tax partner Peter Collins had been banned for two years for leaking confidential Federal Government plans to combat multinational tax evasion.
Treasury had engaged Collins starting in 2014 to assist in drafting new laws, but despite confidentiality agreements Collins shared the secret information widely within PwC, which then sold it to multinationals seeking to avoid Australian tax.
Following February’s Senate hearing, Klug’s TPB responded in writing to questions taken on notice.
“Importantly, Ms Sullivan and Mr Hogan have made declarations of interest to the TPB about their connection to PwC,” the TPB wrote.
“Further, to address any actual or perceived conflicts of interest, Ms Sullivan and Mr Hogan recused themselves and did not sit on the relevant BCC that considered the Peter-John Collins and PwC matters and were not involved in any other relevant matters, decisions and discussions related to Peter John Collins and PwC, including discussions at Board meetings”.
On Friday May 26, days before the Tax Practitioner Board last week fronted the Senate inquiry into consulting services, it was announced Klug had been replaced as chair — after 4.25 years in the role.
His replacement as chair, Peter de Cure — who had been in the role just 48 hours — fronted the Senate inquiry last Wednesday and was asked about PwC links at the TPB and whether former PwC employees had been involved in the Collins and PwC matter
Although Klug’s past at Coopers & Lybrand does not appear on his LinkedIn resume, he, Peter Collins and former PwC Australia CEO Luke Sayers appear to have worked for the same firm at around the same time. Source: LinkedIn
The Tax Practitioners Board gave Collins a two-year ban, short of the maximum five years.
Despite having “breached its obligations under the law” PwC was not penalised, instead being required to have “training in place” to “ensure conflicts of interest are adequately managed”.
Last week O’Neill asked de Cure whether “the reason you didn’t suspend PwC” was related to there being TPB members with links to PwC.
“No. The two board members who were partners of PwC, they were excluded from all discussions in relations to this matter,” de Cure responded.
“They left the room whenever this matter came up, they did not participate in any way, shape or form, in the board conduct committees work, so there was no ability for them to influence these decisions”.
Klug’s TPB responds to questions take on notice at the February Senate hearing. Source: Australian Senate
Yet Klug, who announced the Collins and PwC findings, was chair throughout.
In the January 23 statement, Klug says: “We are very concerned when tax practitioners abuse their positions of trust, or fail to act with integrity”.
‘Leaking confidential information in these circumstances might be seen to elevate personal and commercial profit, breaching public interest, legal and ethical obligations,” says Klug, who is the only person quoted in the statement.
Klug’s extensive LinkedIn bio: no mention of his nine years at Coopers & Lybrand. Source: LinkedIn
Klug and the TPG have for the past week repeatedly refused to comment when asked about Klug’s past and whether he worked at Coopers & Lybrand.
Yet his nine-year career at the firm, where he was a senior tax specialist, including in an overseas posting, feature in an obscure podcast interview Klug gave in 2017.
“I was fortunate enough to get a job with what was then Coopers and Lybrand, which became…PwC,” Klug says.
“I started with them and in a sense the rest is history. I spent nine years then with Coopers and Lybrand, two of which I spent in the UK, working in the London office, which was a fabulous experience.
“I specialised in taxation,” Klug says.
Klug says he was then offered a job at law firm Douglas Heck & Burrell, which later became Pitcher Partners.
“I had really only worked in two different firms, the former Coopers and Lybrand and at Douglas Heck & Burrell, which then morphed into Pitcher Partners,” Klug says.
Regarding his career at the two firms, Klug states: “I’d done a whole range of different things, worked overseas, gone from one division to another, moved from being a specialist tax partner to being a broader business services partner, albeit with a strong tax base”.
“I had really only worked in two different firms, the former Coopers and Lybrand and at Douglas Heck & Burrell” – Ian Klug
The Tax Practitioners Board and de Cure have also refused to comment over the past week, including when asked whether Klug had recused himself from the TPB’s dealings with Collins and PwC.
“The TPB are not making any further public comments on the PwC matter,” TPB communications manager Julie Shaw said in a written statement.
Klug was appointed a director of the Tax Practitioners Board in December 2015, his bio states.
In February 2019 he was appointed chair, for a three-year term, by then Treasurer Josh Frydenberg.
In February 2021 it was announced Klug’s term as chair had been extended.
The announcement last Friday. Klug mentioned only in final sentence. Source: Stephen Jones
Three weeks ago, on the evening of May 17, without any explanation or statement by the TPB, Klug’s named was removed from the TPB’s website.
He was replaced by Peter de Cure, a former tax partner at “big four” consultancy KPMG, who was listed as “acting chair”.
De Cure had been on the TPG board since 2017.
The change was not announced until two weeks later, on May 26 — three business days before the TPB was due to front the senate inquiry — when Financial Services Minister and Assistant Treasurer issued a statement.
Klug is mentioned just once in — in the statement’s final sentence.
The Klaxon’s questions to Klug last week.
Corporate governance expert Dr Andy Schmulow, an Associate Professor in law at the University of Wollongong, said he discovered the change at the TPB while researching for a paper on the PwC scandal.
“On May 17 he was there as chair. The next morning his name was gone, there was no statement, nothing,” Schmulow told The Klaxon.
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