KPMG Australia COO resigns over client leak scandal
The fallout from whistleblower claims about client data misuse at KPMG Australia widened this week as the firm’s chief operating officer stepped down. Eileen Hoggett, who took on the COO role in 2023, will remain as an audit partner while investigations are pending, according to an internal email from interim CEO Stan Stavros that the firm shared with media.
Hoggett was one of the people directly named by the whistleblower. Her departure from the executive position comes days after the resignations of KPMG Australia’s CEO and head of audit over how the firm handled an internal investigation into the allegations. The firm had previously said that investigation didn’t substantiate the whistleblower’s claims.
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Those claims were also shared with Senator Deborah O’Neill from Australia’s ruling Labor party. In March, O’Neill told parliament that the allegations included that confidential board papers from real estate company Lendlease were used to support bids for major audit tenders of Westpac and Dexus.
“Documents were taken from Lendlease by the (KPMG) lead partners on the account, Eileen Hoggett and Paul Rogers, and were physically secured in Ms Hoggett’s locker,” O’Neill said.
Renewed scrutiny on professional services
The allegations have brought fresh attention to Australia’s professional services sector, which was already shaken by revelations in 2023 that PwC shared confidential government information with prospective clients. That scandal led to parliamentary hearings, a spinoff of the firm’s government consulting arm, multiple employee departures, and tighter laws regulating the sector.
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In the email to staff on Wednesday, Stavros said it was clear the firm should have handled the whistleblower’s complaints differently. KPMG has since engaged law firm Allens to conduct a new external investigation.
Hoggett did not immediately respond to a request for comment via LinkedIn.
Governments and regulators step in
The New South Wales government said it sought assurances from KPMG on its management of confidential information and whether any staff under investigation were working on state contracts. In a letter to the firm shared with media, NSW Treasury Secretary Michael Coutts-Trotter requested a list of active contracts with state agencies and asked what KPMG would do to “address issues revealed by these ethical lapses.”
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The Victorian government was also reviewing KPMG contracts to ensure confidential data hasn’t been misused, according to a report.
The Australian Securities and Investments Commission has started a preliminary investigation into the conduct of three KPMG-registered company auditors. A parliamentary hearing into the whistleblower allegations is scheduled for June 19.
