PwC Taps Kevin Burrowes as CEO in Australia, Plans to Sell Government Consulting Arm for $1

PwC Appoints Kevin Burrowes as CEO in Australia, Explores $1 Sale of Government Consulting Arm

Amidst the fallout from the tax leaks scandal, PwC, a troubled consulting firm, has revealed that Singapore-based consulting veteran Kevin Burrowes will assume the role of CEO in Australia. Concurrently, the company is actively seeking to divest its government consulting arm for a nominal fee of $1.

In an official statement on Sunday, PwC Australia confirmed the appointment of Mr. Burrowes, formerly the global clients and industries leader, as the new CEO, taking over from acting CEO Kristin Stubbins. Ms. Stubbins assumed the position in early May following the resignation of former head Tom Seymour amidst mounting government pressure and the continued revelations of tax leaks that severely damaged the firm’s reputation.

This swift appointment of Mr. Burrowes by PwC’s global leaders underscores their intention to address the crisis. The revelation that former partner Peter Collins had utilized confidential tax information to benefit his business dealt a significant blow to the firm’s integrity, tarnishing its brand reputation globally.

Mr. Burrowes’ appointment was expedited, as he is still in the process of completing Australia’s immigration procedures. Meanwhile, PwC’s global chair, Bob Moritz, criticized the previous leadership of the Australian practice, stating that they had failed to uphold the network’s professional standards, code of conduct, and values.

“I am deeply sorry to our clients, our broader stakeholders, and our people,” Moritz added. “PwC Australia has significant work to do, and I am confident that the steps they are taking with the network’s support will result in a stronger firm.”

According to PwC Australia’s statement, Mr. Burrowes will prioritize reforming the firm’s culture, with a particular focus on ethics and controls. His responsibilities include implementing the findings of an independent review conducted by Dr. Ziggy Switkowski, expected to be published in September, as well as managing the potential government response to the scandal.

Expressing his honor at the appointment, Mr. Burrowes pledged to work tirelessly to enhance transparency and rebuild trust within the firm.

In addition, PwC Australia confirmed on Sunday that it is finalizing an agreement to sell its government consulting arm to Allegro Funds, a private equity investment firm specializing in business turnaround. However, the sale is essentially symbolic, with PwC disclosing that the agreed-upon price is merely $1. This stark devaluation reflects the immense damage inflicted on the firm as a result of the tax leaks.

PwC and Allegro Funds aim to complete the agreement by July. PwC Australia Chair Justin Carroll emphasized that the sale is a crucial step in the firm’s efforts to regain client trust and protect its staff. The transaction would establish the first large-scale, dedicated government business in the market. While the move carries inherent risks, given governments’ intentions to reduce contractor usage, PwC hopes to safeguard jobs and rebuild stakeholders’ trust.

The government and Department of Finance have yet to respond to the proposed plan, and some reports suggest that they may view the sell-off as premature, considering that PwC has not fully explained the details of the leaks scandal.

The sale of its government arm would significantly impact PwC, resulting in a substantial reduction in firm size and profit margins. The company revealed that government consulting accounted for approximately 20% of its FY23 revenue and its loss would affect future operations.

It is understood that only partners who were not involved in the tax leaks scandal would be invited to join the new firm, providing it with the best chance of securing new contracts. Successfully establishing the business would also resolve ongoing challenges for senior PwC managers, who have been striving