KPMG partners leaked confidential client information from Lendlease and Optus to colleagues seeking lucrative audit contracts at Westpac, Dexus, and Telstra, a parliamentary inquiry has heard. At least three partners were involved. The whistleblower raised the alarm in an email on 30 May 2024 to Julian McPherson, then head of audit, alleging partners pursued “revenue growth at all costs.” KPMG has admitted to unethical internal leaks but initially refused to hand over its investigations to regulators.
Whistleblower Treatment
The whistleblower told the inquiry that KPMG denied him a pay rise, withdrew his client work, and then threatened to sack him. Former CEO Andrew Yates told the inquiry he initially focused on the whistleblower as an HR issue. McPherson denied threatening the whistleblower, saying, “I don’t recall that it was a definitive decision that he would be terminated.” Both men said they had taken the allegations seriously. KPMG never offered to pay for the whistleblower to get legal advice. Without legal protection, he refused to provide identifying details for his claims.
KPMG management repeatedly asked for more information, even searching his computer in November 2024. Yates did not tell KPMG’s executive, awaiting an internal investigation that failed to find evidence of wrongdoing. In April 2025, independent board members were told of specific allegations. In May 2025, Yates told Lendlease about a leak allegation but said investigations found no evidence. He did not tell Optus, nor did he recall alerting Dexus or Westpac. KPMG only substantiated the allegations and alerted clients after Senator Deborah O’Neill raised them in parliament in March 2026. Yates and McPherson have since resigned, acknowledging they mishandled the complaints.
Law Firm Responses
KPMG brought in two international law firms: UK-headquartered Ashurst and Sydney-based Allens, which had a “long relationship” with KPMG. Neither firm interviewed the whistleblower. Ashurst initially looked into employment issues in February 2025 and gave advice on the internal investigation in June 2025. In December 2025, Allens said it found no evidence of the allegations. In May, KPMG said the investigations had not been rigorous enough and asked Allens to investigate again in March after the claims became public. Both firms stood by their work and are not accused of wrongdoing.
KPMG International's Role
The whistleblower contacted KPMG International. Global general counsel Anne Collins acknowledged his concerns by email in June 2025 and forwarded his email to Freshfields, a London-based law firm. Freshfields later told the whistleblower that KPMG International had no authority to investigate the Australian firm. KPMG International denied wrongdoing and said it took “reasonable and appropriate” steps. It said the whistleblower initially did not provide details, then deferred to Australian investigations. Incoming CEO Gary Wingrove apologised: “I’m sorry, personally.” Freshfields declined to comment, citing client confidentiality.
Government Oversight
The Australian Securities and Investments Commission (ASIC) only began investigating in April 2026 after the leaks became public. ASIC chair Sarah Court told Senate estimates on 5 June that ASIC lacks key powers to investigate partnerships directly and can only investigate registered company auditors. She called for bigger penalties and more whistleblower protections. An inquiry prompted by the PricewaterhouseCoopers tax leaks scandal recommended reforms in 2024, but the government did not respond until February 2026 and did not adopt the recommendations. In June, the government announced it would consider reform of partnership and whistleblower law, with consultation until late July.
New Management Response
KPMG was slow to give the inquiry and regulators full access to its investigations. On 19 June, chair Martin Sheppard claimed legal professional privilege, withholding documents because they involved claims relating to people who may face criminal investigation. That evening, he relented. Sheppard 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.” But the inquiry committee said on Tuesday that KPMG shared only some requested documents. Senator O’Neill said KPMG should also share them with ASIC and the Tax Practitioners Board. KPMG did not comment on whether it had shared the documents with regulators or given the committee full access.
