KPMG admits unethical leaks and whistleblower mishandling
KPMG has acknowledged unethical internal leaks of confidential client information from Lendlease and Optus, used by colleagues applying for lucrative audit contracts at Westpac, Dexus, and Telstra. At least three partners were involved. The whistleblower, a former employee, reported the behavior in an email on 30 May 2024 to Julian McPherson, then head of audit, alleging partners pursued “revenue growth at all costs.” A parliamentary inquiry heard on Friday that KPMG denied the whistleblower a pay rise, withdrew client work, and threatened termination.
How the failings emerged
KPMG’s former CEO Andrew Yates told the inquiry he initially treated the matter as an HR issue. McPherson denied threatening the whistleblower, stating, “I don’t recall that it was a definitive decision that he would be terminated.” Both claimed they took allegations seriously. KPMG never offered to pay for the whistleblower’s legal advice, and without legal protection, he refused to provide identifying details. Management searched his computer in November 2024 but found no evidence. Yates did not inform the executive or clients until Senator Deborah O’Neill raised the allegations in parliament in March 2026. Yates and McPherson have since resigned.
Role of top-tier law firms
KPMG hired international law firms Ashurst and Allens to investigate. Neither interviewed the whistleblower. Ashurst examined employment issues in February 2025 and gave advice on internal investigations in June 2025. Allens, in December 2025, found no evidence of allegations. KPMG later said investigations were not rigorous enough and asked Allens to reinvestigate in March 2026. Both firms defended their work and face no accusations of wrongdoing.
KPMG International’s response
The whistleblower contacted KPMG International, whose global general counsel Anne Collins acknowledged his concerns in June 2025 and forwarded them to Freshfields, a London law firm. Freshfields later told the whistleblower that KPMG International had no authority to investigate. KPMG International denied wrongdoing, stating it took “reasonable and appropriate” steps. Incoming CEO Gary Wingrove apologized, saying, “I’m sorry, personally.” Freshfields declined to comment due to client confidentiality.
Regulatory gaps exposed
The Australian Securities and Investments Commission (ASIC) began investigating only in April 2026 after the leaks became public. ASIC chair Sarah Court told Senate estimates on 5 June that ASIC lacks powers to investigate partnerships directly and can only investigate registered company auditors. She called for expanded powers and bigger penalties, as well as better whistleblower protections. An inquiry into the PwC tax leaks scandal in 2024 recommended reforms, but the government did not respond until February 2026 and did not adopt them. In June 2026, the government announced consultation on partnership and whistleblower law reform until late July.
KPMG’s new management and transparency issues
KPMG initially withheld investigation documents from the inquiry, claiming legal professional privilege due to potential criminal investigations. On 19 June, chair Martin Sheppard relented, then resigned on 23 June. Interim CEO Stan Stavros said, “We are determined to confront what went wrong, act transparently and ensure these failings are not repeated.” However, the inquiry committee said KPMG shared only some requested documents. Senator O’Neill urged KPMG to share documents with ASIC and the Tax Practitioners Board. KPMG did not comment on whether it had done so.
