KPMG's decision to appoint Michael Ebeid as its new chair has ignited controversy, particularly given his past comments dismissing serious allegations against the firm. With a market value of approximately £4.6 billion, KPMG's reputation is under scrutiny following a parliamentary inquiry into the company's ethical conduct and failings. The appointment comes after former chair Martin Sheppard resigned amidst intense pressure from the parliamentary committee.
The decision has been met with concern by Greens Senator Barbara Pocock, a member of the parliamentary committee investigating KPMG's ethics. Senator Pocock stated that Mr Ebeid's leadership 'risks entrenching the very culture and leadership that need to change' within KPMG, suggesting that this move does not signal the fresh start the firm purports to be seeking. Notably, Senator Pocock pointed out that Mr Ebeid was part of the leadership team during the period when the issues arose.
According to emails released by the parliamentary committee shortly after Mr Ebeid's appointment, in March he described a senator's public disclosure of whistleblower allegations as 'very inappropriate and unfair', further stating that many of the statements made were 'completely false'. These comments were made in response to Senator Deborah O’Neill making allegations public regarding leaks and other shortcomings within KPMG’s audit division.
Following the publication of these emails, Mr Ebeid issued an apology, explaining that he was not privy to the 'full range of facts' at the time he made the original statements. He acknowledged the seriousness of the whistleblower's claims and the firm's initial inadequate response, stating that with his current knowledge, he 'would not have written that email and am sorry for sending it'. KPMG itself has conceded that its internal investigations into the allegations were not sufficiently rigorous.
The controversy centres around allegations that at least three KPMG staff members leaked confidential information from clients like Lendlease and Optus to colleagues who were bidding for lucrative audit contracts with other major companies. While Mr Sheppard initially resisted sharing investigation documents with the committee, citing legal privilege, he later relented and resigned. Notably, Mr Ebeid had been the sole independent director to initially support KPMG's privilege claim, contrasting with his two colleagues and his predecessor.
The parliamentary committee highlighted that it released the emails due to Mr Ebeid's new 'important role' in addressing KPMG Australia's integrity issues and rebuilding trust. They also refuted Mr Ebeid's suggestion in the emails that he knew Senator O’Neill, clarifying that no committee member had met with him regarding the whistleblower allegations. Senator Pocock further suggested that Mr Ebeid was attempting to 'exercise inappropriate influence on senators and committee processes'.