KPMG partners leaked client information and mishandled the whistleblower who raised the alarm, an inquiry has heard. Top global and Australian managers, three law firms and government regulators all missed the signs.<\/p>\n
The firm has admitted unethical internal leaks but initially refused to hand over its investigations to regulators. Its London-headquartered international arm has issued a general apology but denied responsibility.<\/p>\n
What did KPMG do?<\/p>\n
KPMG staff leaked confidential Lendlease and Optus information<\/a> to colleagues who were applying for lucrative audit contracts at Westpac, Dexus and Telstra. At least three partners were involved.<\/p>\n The whistleblower raised alarm at colleagues\u2019 behaviour in an email on 30 May 2024 to Julian McPherson, then the head of audit. The email alleged KPMG partners were pursuing \u201crevenue growth at all costs\u201d, alongside other workplace complaints, a parliamentary inquiry heard on Friday.<\/p>\n KPMG\u2019s website says<\/a>: \u201cActing with integrity is at the heart of our values and we all need to make the right decision by speaking up!!!\u201d<\/p>\n The whistleblower told the inquiry that KPMG denied him a pay rise, withdrew his client work, then threatened to sack him.<\/p>\n KPMG\u2019s former CEO Andrew Yates told the inquiry he initially focused on the whistleblower as an HR issue. McPherson denied threatening the whistleblower, saying: \u201cI don\u2019t recall that it was a definitive decision that he would be terminated.\u201d<\/p>\n Both men said they had taken the allegations seriously and had believed they were responding appropriately.\u00a0<\/p>\n KPMG told the inquiry it never offered to pay for the whistleblower to get legal advice on his rights. Without legal protection, the whistleblower refused to provide identifying detail for his claims.<\/p>\n KPMG management said they repeatedly asked for more information on the allegations, even searching his computer to find evidence in November 2024. Yates said he did not then tell KPMG\u2019s executive, instead awaiting an internal investigation, which failed to find evidence of wrongdoing.<\/p>\n In April 2025, independent board members were told there were specific allegations relating to specific companies. In May 2025, Yates told Lendlease about a leak allegation but said investigations had found no evidence.<\/p>\n Yates said he did not tell Optus, nor did he recall alerting Dexus or Westpac. KPMG only substantiated any of the allegations and alerted clients after Senator Deborah O\u2019Neill raised the whistleblower\u2019s allegations in parliament in March 2026.<\/p>\n Yates and McPherson have since resigned, acknowledging they mishandled the whistleblower\u2019s complaints.<\/p>\n How did top-tier law firms respond?<\/p>\n KPMG brought in two top international law firms to investigate the whistleblower: the UK-headquartered Ashurst and the Sydney-based Allens, which told the inquiry it had a \u201clong relationship\u201d with KPMG.<\/p>\n Neither firm ever interviewed the whistleblower, the inquiry heard.<\/p>\n Ashurst initially looked into the whistleblower\u2019s employment issues in February 2025, it told the inquiry. In June 2025, it gave KPMG advice on its internal investigation into the allegations.<\/p>\n In legal advice provided to KPMG in December 2025, Allens said it had found no evidence of the allegations.<\/p>\n In May, KPMG said<\/a> the investigations had not been rigorous enough. It had asked Allens to investigate again in March after the claims became public.<\/p>\n Both firms have stood by the quality of their work and neither is accused of wrongdoing.<\/p>\n How was KPMG International involved?<\/p>\n KPMG International was the whistleblower\u2019s next port of call.<\/p>\n KPMG\u2019s global general counsel, Anne Collins, told the inquiry the whistleblower contacted the international team. The whistleblower told the inquiry Collins personally acknowledged his concerns by email in June 2025, then forwarded his email on to Freshfields, a London-based law firm.<\/p>\n The whistleblower said Freshfields later told him KPMG International was not aware of his concerns and had no authority to investigate the Australian firm\u2019s conduct.<\/p>\n KPMG International, which includes Collins, denied wrongdoing and told the inquiry it took \u201creasonable and appropriate\u201d steps. It said the whistleblower initially did not provide details of his allegations then, when he did, the global firm deferred to the Australian investigations on the belief the whistleblower had been invited to assist.<\/p>\n \u201cKPMG Australia has acknowledged that its conduct has\u00a0fallen short of the standards we hold ourselves to \u2013 and that the community at large expects \u2013\u00a0and we welcome the accountability that the Australian firm has taken,\u201d the international firm said.<\/p>\n Gary Wingrove, KPMG International\u2019s incoming chief executive and the former Australian CEO, has nonetheless apologised for the firm\u2019s handling, saying: \u201cI\u2019m sorry, personally.\u201d<\/p>\n Freshfields declined to comment, citing client confidentiality.<\/p>\n What was the Australian government\u2019s role?<\/p>\n The Australian government has not ensured KPMG and other big partnerships are properly covered by company regulations, the corporate regulator has warned.<\/p>\n The Australian Securities and Investments Commission only began investigating the alleged KPMG failings in April, after they were made public, Sarah Court, Asic\u2019s chair, told Senate estimates on 5 June. Asic lacks key powers to investigate and regulate partnerships directly and can only investigate registered company auditors, Court said.<\/p>\n Asic chair Sarah Court in Senate estimates at Parliament House earlier in June. Photograph: Lukas Coch\/AAP<\/p>\n Court told the inquiry that Asic should be given powers to investigate big partnerships \u2013 as it can for companies \u2013 and called for bigger penalties over breaches of the law.<\/p>\n She also called for more whistleblower protections to cover partnerships, as did KPMG Australia\u2019s outgoing chair, Martin Sheppard.<\/p>\n An inquiry prompted by the PricewaterhouseCoopers tax leaks scandal<\/a> recommended sweeping reforms<\/a> in 2024. The government did not formally respond until February 2026 and did not adopt its recommendations.<\/p>\n In June, the government announced it would consider reform of partnership and whistleblower law. Consultation will continue until late July.<\/p>\n How did KPMG\u2019s new management respond?<\/p>\n KPMG has been slow to give the inquiry and regulators full access to its investigations into the allegations.<\/p>\n On 19 June, Sheppard, KPMG\u2019s chair at the time, told the inquiry the firm was claiming legal professional privilege and withholding the documents\u00a0because they involved claims relating to people who may face criminal investigation. That evening, he relented.<\/p>\n KPMG then announced Sheppard would resign on 23 June. The interim CEO, Stan Stavros, said the change was necessary.<\/p>\n \u201cWe are determined to confront what went wrong, act transparently and ensure these failings are not repeated,\u201d Stavros said.<\/p>\n But KPMG only shared with the inquiry committee some, not all, of the documents it requested, the committee said on Tuesday. Its chair, Senator O\u2019Neill, said KPMG should\u00a0also share the documents to Asic and the Tax Practitioners Board for their\u00a0investigations.<\/p>\n KPMG did not comment when asked if it had shared the investigations\u00a0with regulators or given the committee full access.\u00a0Asic and the TPB did not comment\u00a0on Friday\u00a0when asked if KPMG had shared the documents.<\/p>\n","protected":false},"excerpt":{"rendered":"KPMG partners leaked client information and mishandled the whistleblower who raised the alarm, an inquiry has heard. 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