Revelations about former PwC CEO meeting ‘very concerning’, says ASIC

Senator Barbara Pocock has questioned the plausibility of former PwC chief Luke Sayers forgetting a meeting in which the ATO raised several misdemeanours directly with him.

Editor’s note: This story first appeared on HR Leader’s sister brand, Accounting Times.

Appearing before an economics legislation committee hearing, Australian Securities and Investments Commission (ASIC) chair Joe Longo was asked to share his views on the claim by former PwC chief executive Luke Sayers that he has no recollection of the Australian Taxation Office (ATO) informing him of several misdemeanours by PwC partners and staff.

The ATO revealed last week that ATO Second Commissioner Jeremy Hirschhorn had met with Sayers to raise seven different misdemeanours relating to PwC directly.

Senator Barbara Pocock said that while the ATO had previously provided some dot points about what was discussed at the meeting, she had received a much more fulsome account of what occurred at the meeting last week.

“The Australian public already knew that PwC had used confidential information about tax to assist multinational companies and monetise that relationship, but we now know that was only one of seven different misdemeanours that were raised with Luke Sayers,” said Pocock.

“There were two other things which I think should be of great interest to regulators. PwC assisted clients in the preparation of responses to request for information notices where the material in those responses was false or misleading to the knowledge of PwC staff involved. That’s a serious misdemeanour.

“Further, there was involvement in the Foreign Investment Review Board approval process on behalf of clients, which, through omission and commission, had the potential to mislead or subvert those processes. I also think this is a very serious misdemeanour.”

Pocock noted that a meeting had occurred between the second commissioner and Sayers where not only were all these matters placed before Sayers, but he was personally read excerpts from the emails which showed the extensive circulation of confidential information through the corridors and among many people within PwC.

The senator said the ATO had done this in the hope that it would lead to a change in behaviour at the big four firm.

“I would think that would be a memorable experience, to have the second commissioner of the ATO read you your internal emails and then discuss those seven items in detail,” said Pocock.

“We hear that Luke Sayers, the person with whom this conversation occurred, has no memory. That has been his sustained position, he has no memory.”

Pocock noted that this has been Sayers’ sustained response throughout the whole series of events and questioned the ASIC chair about how plausible it is that he would not recall the meeting or the details of the meeting.

Longo acknowledged that while he couldn’t establish with certainty who was telling the truth about the events that occurred, it was “a very serious situation”.

“On the face [of] it, those calls for explanation and those very strident reminders of what was said in the emails appear to not have had any impact. It’s certainly a very serious situation,” said Longo.

“ASIC does a wide range of investigations across a wide range of circumstances and regrettably, entities that should know better don’t always cooperate. They don’t always do the right thing which is why we’re in court most days of the year.”