TAX AVOIDANCE: PwC Australia sells advisory business amid tax leak scandal

Consulting giant PwC has offloaded its lucrative Australian government advisory business for 1 Australian dollar ($0.67) as it tries to move on from a damaging tax leak scandal.

PwC Australia has been mired in controversy since January, when news emerged that staff had shared information from a confidential government tax briefing to drum up new business.

After sacking a string of executives on Monday, PwC said on Tuesday it had completed the sale of its government advisory business, which held contracts worth 255 million Australian dollars ($167m) last year.

Buyer Allegro Funds said the new entity would be called Scyne Advisory and would have about 1,750 staff.

In a statement provided to the AFP news agency, Scyne Advisory partners Tim Jackson and Ben Neal said: “We have a once-in-a-generation opportunity to lead the change required in government advisory in Australia.”

The needs of clients would remain “paramount”, they said, adding: “Restoring those clients’ trust is our number one priority”.

The scandal that led to the sale dates back to 2015, when the Australian government introduced a series of new rules designed to stop foreign firms from shaving their tax obligations by shifting profits to offshore havens.

A government inquiry earlier this year found that a senior PwC staffer who was briefed on the reforms shared the information with other partners, breaching confidentiality rules.

The firm then used its knowledge of the new rules to “aggressively market” itself to new customers, the inquiry said.