Ex-PwC boss Tom Seymour denies involvement in document disclosure issue
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More news: Former PwC CEO Tom Seymour has hit back at suggestions made earlier in the day by former general counsel Meredith Beattie at a parliamentary committee hearing that he was directly involved in failures to adequately disclose documents to the Australian Taxation Office.
“The much larger challenge we had was that privilege doesn’t apply to a file or client it applies to each document and there were hundreds of thousands of documents,” he said.
“There were in round numbers … about 130 notices issued by the tax office in total. Six notices were challenged by the tax office for not being delivered correctly and the settlement agreement that was entered into with the tax office. PwC settled on one of those six and the other five were dropped. That’s the facts.”
He said in mid- to late-2018 he first became aware there was a “real issue” around the documents but he said Beattie was responsible for the document production process.
“It’s fair to say there was tension between myself and Ms Beattie through that process,” he said. He said his frustrations related to the process being too legalistic and taking too long.
Beattie told the committee earlier in the day she voted against Seymour’s accession to CEO and had given information to the board about her concerns. Seymour’s predecessor, Luke Sayers, told the committee he remembered “reservations” from Beattie about Seymour but was unable to recollect the specifics. He said he “never got into a discussion” with Beattie about who she favoured for the position.
“At the end of the day it’s the board’s decision to weigh up the good, the bad and the ugly if you will,” he said.
“I do not believe she ever provided legal advice to me as the chief executive officer [about Seymour],” he said. But he said Beattie had “high integrity” and he wasn’t disputing her evidence.
Seymour said the issues with the tax office were widely known among the firm, including the board and executive.
“I would not have run [for CEO] if I thought it was not in the best interest of the firm and that was not put to me,” he said.
Seymour stepped down from the role last year amid the unfolding crisis at the firm.
PwC reviewer Switkowski unable to interview ex-CEO Tom Seymour
The news: Former Telstra boss Ziggy Switkowski, who undertook an independent review of PwC directed by the firm, has told a parliamentary committee that he was unable to speak to the firm's former CEO Tom Seymour as part of his research into the firm.
The context: While Switkowski met Seymour's predecessor Luke Sayers as part of the review, he said he was unable to secure a meeting with Seymour in time for the review and there was a marked difference between his attempt to contact the two former PwC bosses.
“I’ve never spoken to Mr Seymour, I don’t know him. The only interaction I had with his office was with his lawyers," he said.
While he said there was no resistance from PwC itself when undertaking the review, which was confined by terms of reference that came from the firm, he said he still had to resist "quite severe" temptations to deviate from the terms.
Earlier in the hearing former PwC general counsel Meredith Beattie revealed that the tax division had been incorrectly claiming legal professional privilege when responding to the Australian Taxation Office’s correspondence from 2016.
She determined, after a review, that this was out of step with the firm’s policies in place. She said the relationship had become “very, very tense” between the firm and the ATO in 2017 and 2018 after PwC failed to comply with its obligations to respond to compulsory notices and the firm was dealing with “thousands and thousands of documents".
Under questioning from Labor MP Daniel Mulino about the partnership model compared to a corporate model, Beattie said she didn’t think that “necessarily the nature of the model is what’s important” but instead “the conduct”.
She said executive and governance boards could work effectively together and had in the past but she did say that partnerships “were never meant to get to 900 people”.
“Maybe some thought could be given … to someone who does an audit on conflict each year,” she said. Mulino suggested some conflicts may be unmanageable and Beattie replied that some "good guidance about what can and can't be done" would be useful alongside independent checks and balances.
What they said: "What I found was people were able to offer explanations, a narrative, etcetera and to do it reasonably convincingly. The people being PwC people. But often the narrative was glossier than reality. Not deliberately, it’s just the way these firms operate,” Switkowski said.
The source: Parliamentary Joint Committee on Corporations & Financial Services public hearing
