SYDNEY, June 5 - Australia’s corporate regulator has moved from a preliminary assessment to a formal investigation into three KPMG Australia partners connected to whistleblower allegations that the accounting firm misused confidential client data to win lucrative audit work.
The Australian Securities and Investments Commission (ASIC) said the escalation came after it opened a preliminary probe in April and then intensified its scrutiny following the resignation last week of KPMG Australia’s CEO and its audit chief.
"We have commenced our formal investigation earlier this week and I should also make clear that we have issued multiple compulsory notices throughout that period to KPMG," ASIC Chair Sarah Court told a Senate committee on Friday. She added that "there are three registered company auditors that are currently within the scope of what we were looking at," while cautioning that the inquiry remains fluid as new information is received: "I don’t know that will be the end of it."
ASIC Chief Executive Scott Gregson said the regulator has sought assurances from KPMG that partners linked to the allegations are not involved with any of the regulator’s active contracts with the firm.
The whistleblower allegations, shared in March by Senator Deborah O’Neill, included claims that confidential board papers from Lendlease were used to support bids for major audit tenders at Westpac and Dexus. KPMG had previously investigated the claims internally and reported it could not substantiate any misconduct; it has since engaged law firm Allens to lead a fresh external review.
Court told the Senate she has "deep concerns" regarding the alleged conduct but noted a constraint on ASIC’s powers: while the regulator can target individual auditors, it lacks authority to directly regulate KPMG as a partnership entity.
The controversy has already affected the firm’s relationships with some public-sector clients. Reserve Bank of Australia Governor Michele Bullock confirmed at the committee hearing that KPMG provided a whistleblower service to the central bank under a contract worth A$10,000 a year. "I don’t think we’ll be reappointing them to the whistleblower service," she said. Bullock also said a separate contract with KPMG for arranging foreign employee recruitment will be re-tendered.
The article includes the currency conversion noted in the hearing: $1 = 1.4043 Australian dollars.
Context included in the original reporting
The original report referenced market tickers tied to the companies mentioned. KPMG did not immediately respond to requests for comment on the investigation.
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