KPMG high-flyer sues over her whistleblower scandal sacking

Sacked KPMG executive Eileen Hoggett is suing the firm after her abrupt dismissal over confidential client documents kept in her work locker.

The NSW Supreme Court confirmed that a summons has been lodged in her name against a KPMG entity with the first hearing scheduled for September 23.

No court documents are available at this stage.

The court listing shows she is legally represented by employment law specialist Bryan Belling.

Hoggett, a former chief operating officer, has said previously that she copped a hefty financial penalty from being expelled from the firm in July. KPMG has been thrown into turmoil by damaging allegations aired by a whistleblower that confidential client data was accessed and used to win new clients.

She was expelled from the firm in July after new evidence emerged to support a whistleblower’s allegation that sensitive Lendlease board documents had been kept in a locker in KPMG’s Sydney office.

The board documents were used to win business with other clients. The locker was Hoggett’s.

New CEO John Sams sacked her immediately over the issue, after Hoggett had previously denied the documents were in the locker.

“To say I am angry about this is an understatement. The conduct was totally unacceptable, and it is unacceptable that it has taken so long for us to get to this point,” Sams told partners when Hoggett’s expulsion was announced.

“I was provided with a copy of an email dated back from 1 May 2023, three weeks ago, that would convey that I had a copy of Lendlease documents that were in my locker,” Hoggett told a public hearing into the whistleblower scandal last month.

The email was tabled in the public hearing last month: “I think we confidentially allow him to look at the printed version in my locker when he is back in Sydney. He needs to do it sensitively without letting too many people know,” she said in an email that concluded with a smiley emoji.

Hoggett told the hearing: “There is no one more disappointed in me than myself at this email,” but Hoggett also said she was still trying to ascertain the reason for her unprecedented sacking, and attested to the financial cost.

“I don’t get my accrued annual leave. I don’t get the retirement payment, which I contributed to as a partner for 21 years, and I did not get paid for the last month up until to the date of my expulsion. So [it’s a] significant financial penalty,” she said.

Hoggett had already resigned over the scandal but had yet to leave the firm. She would have left with a significant retirement benefit – expected to exceed a million dollars – if that had proceeded.

Former KPMG boss Andrew Yates, who resigned over the scandal in May, received a retirement payment of $2.4 million, including $1.7 million in lieu of notice.

Hoggett told the hearing that her abrupt sacking had no precedent within the KPMG partnership, and she had no opportunity to respond.

“I was out walking one morning, and I received a call from the CEO [John Sams], who advised that I was being expelled. I asked to understand the rationale and the reason for that because that is unprecedented. It’s something that’s never occurred in our partnership before.”

Law firm Corrs, who is advising Hoggett in relation to the regulatory investigations by ASIC and accounting body CAANZ, declined to comment.

KPMG was approached for comment.

At a public hearing of the parliamentary committee on Friday, the Australian Securities and Investments Commission (ASIC) is expected to provide an update on the investigation.

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