PwC Australia and Allegro Funds have finalised the deal to create Scyne Advisory, the government-only consulting play.
The sales agreement signed yesterday sets out the terms for the split of the former government consulting arm from the big four behemoth following the tax leak scandal that has engulfed the global accounting firm since January.
There are still some hurdles for Allegro Funds to clear such as regulatory and third-party approvals – these are expected to be cleared by mid-October, according to a Scyne spokesman – but the signing of the sales agreement means PwC has sealed the door to playing in the government space.
After exploring other options, PwC Australia decided a sell-off was the only way it could save consultants’ jobs, given the tax leak scandal and its aftermath resulted in government departments expressing disappointment in the conduct of the firm in policy consultations on multinational anti-avoidance laws more than eight years ago.
Former PwC tax partner Peter Collins had his tax agent registration terminated late last year by the Tax Practitioners Board, and PwC received an order requiring it to ensure it spruced up its conflict monitoring and training processes where confidential consultations are concerned late last year.
The agreement between Allegro Funds and PwC Australia comes a week before a two-day hearing of the parliamentary committee looking at consulting firms and their behaviour when providing services to government.
That committee, which is set to hear from non-accounting practices as well as government departments, will further explore what practical solutions might be implemented to better manage conflicts of interest, improve oversight of contract performance, and encourage firms and individuals engaged to provide services to government to behave better.
It also coincides with the federal government’s release of four pieces of legislation that deal with areas that emerged as concerns in the PwC breach of confidentiality.
A late-night media release on Tuesday heralded a 15-day comment period for four tranches of information that deal with information sharing, the protection of whistleblowers, increases in the penalties for the promotion of tax schemes, and reforms to the Tax Practitioners Board that include an extension of time to tackle complex investigations.
The deadline for comments on four tranches of reform is October 4.
“The Albanese government is taking a strong stance against blatant misconduct in our tax advice industry and has today released draft legislation designed to strengthen our tax system and give greater powers to our regulators,” treasurer Jim Chalmers said.
“The PwC scandal exposed severe shortcomings in our regulatory frameworks that were largely ignored by the Coalition and we continue to take significant steps to clean up the mess.
“Our crackdown on misconduct in the industry will help to prevent this from happening again and will ensure that if it does, our regulators have what they need to hold parties to account.”
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