PwC contracts frozen by $191B Australian pension fund

Australia’s largest pension fund AustralianSuper has frozen all future contracts with PricewaterhouseCoopers as it assesses the fallout of the embattled accounting firm’s tax advice scandal. 

The A$290 billion ($191 billion) fund’s management has expressed its concerns to PwC about the disclosures “at the highest level,” a spokesman for the fund told Bloomberg on Friday. It was paying the firm more than A$2 million a year for services including the audit of its annual financial report, the document shows. 

“AustralianSuper is concerned with the ongoing revelations around PwC and as a result has frozen any new contracts with PwC,” the spokesman said in an emailed statement. 

One auditing contract with PwC is currently underway and will run its course, the spokesman said. It will be reviewed later this year in line with annual processes, he said. 

A spokesman for PwC declined to comment.

The Australian arm of the global consulting giant has faced intense scrutiny following revelations that a former senior partner obtained confidential tax policy information while advising the government. PwC then leaked the advice to colleagues who used it to advise global clients. The firm is now under pressure over how many employees were aware the information was being leaked.

Reserve Bank of Australia Governor Philip Lowe this week also confirmed that the central bank wouldn’t enter any contracts with PwC until the issues had been resolved. The Australian Prudential Regulation Authority said it had asked the country’s major banks about their dealings with PwC.

Another pension fund, A$150 billion Aware Super said it was working with PwC to “satisfy ourselves that none of the tax advisors who have advised Aware Super have been implicated in the current matter,” a spokesman said in an emailed statement on Thursday. 

“We are undertaking our own internal review to ensure the best interests of our members are being supported in all of these consultancy relationships,” the statement said. 

— With assistance from Nabila Ahmed