Former KPMG partner accused of sexual advances and secret cash payments in whistleblower letter tabled in parliament

The document, a letter sent to KPMG on August 30, 2023, was tabled in redacted form earlier this month by the inquiry. It focuses on conduct by Philip Henry, who worked at the firm until his publicly reported departure in 2004.

The whistleblower alleges Mr Henry treated "female members of staff and clients inappropriately", including making "unwanted sexual advances". The letter also accuses him of receiving secret commissions paid in cash from a client after devising tax schemes, and in other instances receiving personal gifts from clients instead of fees or to reduce fees.

According to the letter, a redacted individual was "selling tax losses which Philip Henry knew to be non-existent or materially deficient and also knew that [redacted] had not filed income tax returns for more than 25 years".

The whistleblower states she was held responsible for wrongdoing she attributes to Mr Henry, including being pursued by tax authorities.

The inquiry is investigating how KPMG audit partners allegedly misused client data and mishandled a whistleblower's complaint about it. It has since heard from other whistleblowers at KPMG and other big four firms.

Separately, ABC News has reported on allegations against Chris Jordan, a former KPMG partner who later led the Australian Taxation Office. A 2021 whistleblower document alleged Mr Jordan avoided paying tax during his time at the firm and called his appointment to lead the ATO "corruption at the highest level".

Why This Matters

The allegations add to a growing pattern of misconduct claims against senior figures at Australia's big four consulting firms, raising questions about cultural and ethical standards.
The parliamentary inquiry's findings could lead to regulatory reforms in how consulting and auditing firms handle whistleblower complaints and misconduct allegations.
The involvement of a former KPMG partner who later headed the ATO (Chris Jordan) in separate allegations deepens concerns about conflicts of interest and oversight within Australia's tax governance system.

Background

KPMG is one of the "big four" accounting and consulting firms operating in Australia. The current parliamentary inquiry was triggered by revelations that KPMG audit partners had misused confidential client data and then mishandled a whistleblower's complaint about the misconduct. The inquiry has broadened to examine workplace culture and ethical practices at the firm. Philip Henry left KPMG in 2004, meaning the allegations relate to conduct more than two decades ago.

Key Perspectives

[The Whistleblower]: Alleges a pattern of inappropriate sexual conduct and financial impropriety by a senior partner, and claims she was unfairly held responsible for associated wrongdoing. [KPMG]: Has not publicly commented on the specific allegations against Henry, which date back to before 2004; the firm is under scrutiny from the parliamentary inquiry. [Critics/Skeptics]: Some may question the reliability of decades-old allegations or argue the letter contains insufficiently substantiated claims. Others note the redactions prevent full public assessment of the evidence.

What to Watch

Whether the parliamentary inquiry calls Philip Henry or other named individuals to give evidence.
Any response from KPMG regarding the specific allegations in the tabled letter.
Potential expansion of the inquiry's scope to examine broader cultural issues across big four firms.

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