KPMG to be grilled at parliamentary inquiry on secretly stashing client files

KPMG to be grilled at parliamentary inquiry on secretly stashing Lendlease files as other firms come under focus Tue 28 Jul 2026 at 2:27pm Accounting firm KPMG is expected to be hauled before a federal inquiry to answer further questions about why one of its former employees stored printed copies of confidential Lendlease board documents in her locker and shared them with her colleagues to win audit contracts. Under allegations raised in parliament earlier this year, partners at KPMG leaked client information and mishandled a whistleblower who raised the alarm. In March, Labor senator Deborah O'Neil shared with parliament a whistleblower's allegations, which included that confidential board papers from Lendlease were used to support bids for major audit tenders for Westpac and Dexus. KPMG had conducted an internal investigation into the claims but failed to substantiate misconduct. It has since engaged law firm Allens to conduct a new external investigation. Since then, a host of partners at the firm, including CEO Andrew Yates and chairman Martin Sheppard, have resigned. Former chief operating officer Eileen Hoggett, who was stood down last month, was sacked by the firm on Friday after the firm's new chief executive, John Sams, briefed staff that the firm had uncovered an email in which Ms Hoggett referred to keeping and sharing a printout of the confidential client papers in her locker. The papers were used by Ms Hoggett and other partners to help KPMG win work, and confirms the serious allegation made by a whistleblower that this was happening, but whose complaint was dismissed by KPMG at the time. Ms Hoggett has been contacted for comment. KPMG confirms confidential client documents were stashed in locker by partner and used to win contracts KMPG told ABC News, and the parliamentary committee investigating the matter, that the firm had since confirmed the whistleblower's allegation that client information relating to the Lendlease audit was retained in a locker at KPMG's Sydney office by Ms Hoggett. "I can confirm that the ongoing investigation by external law firm Allens has uncovered new evidence that supports the whistleblower's allegation that confidential client information was kept in a locker at KPMG's Sydney office," a KMPG spokesperson said. "Earlier this month KPMG CEO John Sams told partners that the conduct was totally unacceptable and it was unacceptable that it took so long for the truth to come out. "He took action to expel a partner from the firm. Mr Sams highlighted the courage and persistence of the whistleblower. The investigations into whistleblower allegation remains ongoing. "KPMG has updated impacted clients and the relevant regulatory and professional bodies." In correspondence with the Parliamentary Joint Committee on Corporations and Financial Services, KPMG chief executive John Sams also confirmed that the allegation about the locker storage was previously "denied by Ms Hoggett". But he said that "based on the evidence now obtained, KPMG accepts that the allegation has been substantiated". Mr Sams said the firm had disclosed the matter to ASIC, Chartered Accountants Australia New Zealand and the Department of Finance. It had also informed Lendlease of the new evidence and "apologised again for this serious breach of trust". Mr Sams also acknowledged the role played by the whistleblower in bringing the matter to light and said: "I regret the way aspects of this matter were handled in the past." "It is unacceptable that it has taken this long for the truth to come out, and that it has come to light in this manner,"Mr Sams said. "It is also very clear that we need to reflect on this, learn from it, and make meaningful changes." The committee also received correspondence that, at the time of the whistleblower's complaint, then-chairman Martin Sheppard was directly involved in managing the interactions between the whistleblower and independent directors. In an email in November 2024, after the whistleblower had raised his concerns with the firm internally, Mr Sheppard wrote to directors at the time Mike Baird, Patty Akopiantz and Jane Hemstritch to contact the firm's chief legal counsel, Louise Capon, should they be contacted by the whistleblower. The committee also received correspondence that while the firm eventually asked law firm Allens to independently investigate the whistleblower's complaint, management would be briefed on its findings "at each relevant board meeting". These updates about the investigation would be provided in the context of confidentiality and legal professional privilege and "any individual with a conflict of interest will be required to absent themselves from any such reporting". Several KPMG employees under ASIC investigation On August 14, KPMG is expected to face further scrutiny over how they handle personal client information. At a parliamentary hearing on May 29, corporate watchdog ASIC confirmed that Ms Hoggett as well as other individuals at the firm, Paul Rogers and Kim Lawry, were under investigation. Mr Rogers and Ms Hoggett are the subject of the Lendlease aspect of that formal investigation. "ASIC commenced the formal investigation as ASIC had (and continues to have) reason to suspect there may be a contravention of the Corporations legislation in respect of Mr Rogers and Ms Hoggett's roles as engagement partner and lead auditor respectively in respect of the Lendlease audit," ASIC said in answers to questions on notice given to the inquiry. "Ms Lawry is not under formal investigation by ASIC in respect of the alleged misuse of Lendlease information at this time as she did not have a role in the Lendlease audit like Mr Rogers and Ms Hoggett. "Notwithstanding Ms Lawry is not the subject of ASIC's formal investigation in respect of the Lendlease matters, Ms Lawry's conduct in her capacity as a registered company auditor remains under consideration as part of ASIC's broader inquiries into the KPMG matters. "The scope of ASIC's formal investigations, including those persons under investigation, can change as investigations continue." Other big-four firms and corporates could also face ASIC investigation ASIC has also cast a wider net in investigating conduct at big-four accounting firms — Deloitte, EY and PwC — in light of allegations concerning auditor conduct at KPMG and after two men were sacked from Ernst and Young after the prime minister's personal banking information was allegedly breached. ASIC says its surveillance will examine internal complaints, including whistleblower complaints, received by the firms in connection to the external audit services they provide. This will include whether the firms have received complaints relating to misconduct by auditors, such as the misuse or sharing of confidential information. "ASIC will use the existing suite of limited powers available to us, while continuing to engage constructively with the government's reform process," ASIC chair Sarah Court said. The regulator's surveillance of the audit firms comes as Treasury consults on options to strengthen regulation of the industry, including gaps in ASIC's ability to respond to firm-level misconduct. In the wake of the KPMG audit leaks scandal, the federal government is considering splitting accounting firms' auditing and consulting arms. Other corporates could also come under further focus as the inquiry and ASIC's investigations continue. During Macquarie's annual general meeting this month, shareholders grilled the board on its audit tender process following allegations by the KPMG whistleblower that it misused client information to win contracts. Chairman Glenn Stevens told its annual general meeting the board was looking into KPMG's ongoing capability and capacity to deliver Macquarie's audit. In November 2025, Macquarie announced KPMG was its recommended auditor and would commence at the beginning of FY28, subject to regulatory consents and approval from shareholders. At last year's AGM, Mr Stevens dismissed questions over its KPMG audit contract as "silly talk". At the time, shareholders had questioned the independence of director Michelle Hinchliffe and the group's decision to award $75 million a year in business to her former employer. At the latest AGM, Mr Stevens said the board unanimously recommended KPMG during the tender. "We remain confident in the way we ran a robust tender process and the balance we sought throughout between utilising Michelle's global expertise and managing her potential conflicts, which she fully disclosed," Mr Stevens said. Westpac has also been looking at the future of its $32 million-a-year audit contract with KPMG. Westpac's audit committee chairman, Peter Nash, spent nearly 25 years at KPMG and was national chairman until 2017. He retired from Westpac's board earlier this month, because of perceived conflicts due to his links to KPMG. ABC News asked ASIC whether it was investigating others including Macquarie's Michelle Hinchliffe and Westpac's Peter Nash as part of its probe. A spokesman told ABC News: "ASIC continues to engage with KPMG and obtain information from them and other parties relevant to our ongoing investigations, the scope of which we will continue to review as appropriate." The KPMG audit leaks matter is also being investigated by the Tax Practitioner's Board (TPB), which according to its website, "regulates tax practitioners to protect and assure consumers that tax practitioners meet appropriate standards of professional and ethical conduct". In correspondence to the committee, TPB's current chair, Peter de Cure, who was a former partner at KPMG, said that he would take steps to ensure he had no role or influence over the board's investigation of the matters.