A parliamentary inquiry has revealed that KPMG partners leaked confidential client information and mishandled the whistleblower who raised the alarm, with top global and Australian managers, three law firms, and government regulators all missing the signs. The firm admitted to unethical internal leaks but initially refused to hand over its investigations to regulators.
What Did KPMG Do?
KPMG staff leaked confidential Lendlease and Optus information to colleagues applying for lucrative audit contracts at Westpac, Dexus, and Telstra. At least three partners were involved. The whistleblower raised concerns in an email on 30 May 2024 to Julian McPherson, then head of audit, alleging partners pursued "revenue growth at all costs."
KPMG's website states: "Acting with integrity is at the heart of our values and we all need to make the right decision by speaking up!!!" Yet the whistleblower told the inquiry he was denied a pay rise, had client work withdrawn, and was threatened with dismissal. Former CEO Andrew Yates said he initially treated the matter as an HR issue. McPherson denied threatening termination, saying: "I don't recall that it was a definitive decision that he would be terminated."
KPMG did not offer 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 KPMG's executive, awaiting an internal investigation that failed to find wrongdoing.
In April 2025, independent board members were told of specific allegations. In May 2025, Yates informed Lendlease but not Optus, Dexus, or Westpac. KPMG only substantiated allegations after Senator Deborah O'Neill raised them in parliament in March 2026. Yates and McPherson have since resigned.
How Did Top-Tier Law Firms Respond?
KPMG hired UK-based Ashurst and Sydney-based Allens to investigate. Neither firm interviewed the whistleblower. Ashurst examined employment issues in February 2025 and advised on internal investigations in June 2025. Allens found no evidence in December 2025. In May, KPMG deemed the investigations insufficient and asked Allens to reinvestigate. Both firms stand by their work and are not accused of wrongdoing.
How Was KPMG International Involved?
KPMG International's global general counsel, Anne Collins, acknowledged the whistleblower's 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 the Australian firm. KPMG International denied wrongdoing, stating it took "reasonable and appropriate" steps. Incoming CEO Gary Wingrove apologized: "I'm sorry, personally." Freshfields declined to comment.
What Was the Australian Government's Role?
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 powers to investigate partnerships directly and can only investigate registered company auditors. Court called for expanded powers and bigger penalties, as well as more whistleblower protections. The government, which had not adopted 2024 reform recommendations, announced in June 2026 it would consider partnership and whistleblower law reforms, with consultation until late July.
How Did KPMG's New Management Respond?
KPMG initially withheld investigation documents, claiming legal professional privilege. On 19 June, chair Martin Sheppard relented after telling the inquiry the documents involved people who may face criminal investigation. 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." However, the inquiry committee said KPMG shared only some documents. Senator O'Neill urged KPMG to share documents with ASIC and the Tax Practitioners Board. KPMG did not comment on whether it had shared the investigations with regulators.
