Australia says it cannot cancel existing PwC contracts given legal constraints

SYDNEY (Reuters) – Australia said on Thursday it cannot cancel existing contracts with auditor PricewaterhouseCoopers (PwC), which is embroiled in a scandal involving leaking confidential government tax plans to corporate clients, due to legal constraints.

This comes as lawmakers have called for the cancellation of PwC Australia’s existing government contracts and a ban on it getting more government contracts in the wake of the scandal.

The government, a PwC Australia client, has asked the police to look into the tax document leak to consider commencement of a criminal investigation.

“We face legal constraints around existing contracts, but I can tell you there is some furious work going on within government to understand what the legal constraints are on us here,” Home Affairs Minister Clare O’Neil said on ABC Radio, when asked if any new government work with PwC would be stopped.

A PwC spokesperson declined to comment on the minister’s remarks and referred instead to an earlier statement where the auditor said it was “committed to learning from our mistakes”. PwC’s Australia CEO stepped down this month amid the scandal.

The government has said a former tax partner at the firm improperly used confidential Commonwealth information. Emails tabled in parliament earlier this month revealed many individuals at the firm were privy to the information.

The actions by PwC are a “grotesque betrayal of trust” of the government and the citizens, O’Neil told ABC Radio.

“We will not stop until we get to the bottom of exactly what has happened here. It is a disgraceful incident, and it must be properly investigated and the people responsible held to account,” the minister said.

PwC said this month that former Telstra and Optus CEO Ziggy Switkowski would lead an independent review into the leak and will report his findings and recommendations in September.

(Reporting by Praveen Menon and Lewis Jackson; Editing by Himani Sarkar)