KPMG chair to resign after damning hearing and legal backflip

KPMG’s chairman Martin Sheppard will quit the company, becoming the latest leader to resign over the consultancy’s handling of allegations from a whistleblower that it misused confidential client information.

Late last month, Sheppard accepted the resignations of chief executive Andrew Yates and audit head Julian McPherson after KPMG confirmed the allegations that confidential client data had been shared and potentially used to win new business with other clients.

But Sheppard resisted internal and external pressure to take personal accountability for the firm’s years-long delay in publicly confronting the scandal until now.

After a bruising parliamentary hearing where KPMG executives were questioned on Friday, Labor senator Deborah O’Neill, who triggered the scandal in March when she revealed the damning whistleblower allegations, questioned whether the firm’s current leadership team could clean up its culture.

On Monday, in an ABC interview, O’Neill slammed Sheppard – a former partner at the firm – for continuing to defend the group at Friday’s public senate hearings. She said the firm had yet to get to grips with the scale of its failure.

“You’d have to look at the performance of the leadership team there the other day and wonder what on earth they think they’re doing,” she said. “I don’t think KPMG fully understand the problems that they have generated, and I don’t know that the team to clean up this mess is there.”

The firm spent much of the hearing arguing that it should not have to provide the investigating committee with documents relating to its investigations of the whistleblower and his claims. KPMG argued they were legally protected. But late in the day, Sheppard relented.

After the hearing, the anonymous whistleblower tabled documents about their experience and alleged that KPMG had made changes to its work policies in an attempt to fire him within weeks of his complaint in 2024.

“A person who makes a protected disclosure and within two weeks receives a denial from the eligible recipient and a subsequent threat of termination is not being invited to cooperate,” the whistleblower said in one of their statements published by the Senate committee after the hearing.

Sheppard is expected to announce his resignation on Tuesday.

Lendlease is preparing to dump KPMG as its auditor and the federal government has effectively suspended the firm from winning any further business for several months.

More to come.

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