FirstFT: PwC Australia to overhaul board after critical tax leak scandal report

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PwC’s Australian partners overlooked rule-breaking by “rainmaker” colleagues in the pursuit of revenue growth, according to a damning report on a scandal involving the misuse of government tax secrets.

The independent report, released today, assailed an “overly collegial” culture in which too much power was concentrated in the Australian firm’s chief executive and loyalty was rewarded above challenging more senior partners.

In response PwC Australia promised to install an independent chair above the chief executive and agreed a series of other governance changes, hoping to help draw a line under a political scandal that has tarnished its reputation in the country and prompted multiple investigations across the firm’s global network.

The scandal was triggered by revelations that a PwC partner who acted as an adviser to the government had passed information about upcoming tax changes to colleagues, who used it to tout for business among US tech companies including Google and Uber. Here’s more from the report.

Here’s what else I’m keeping tabs on today:

• Economic data: GfK has its consumer climate survey for Germany and the US reports monthly durable goods orders.

• Spanish politics: The conservatives are expected to lose a parliamentary vote to form a government following inconclusive polls in July, opening a path for acting prime minister Pedro Sánchez via a potential amnesty deal with Catalan separatists, which has drawn criticism.

• Results: Updates are expected from Jefferies, Saga and fast-fashion retailer H&M, whose shares suffered this month when it published weaker than expected sales figures.

Five more top stories

1. The US Federal Trade Commission and 17 states have sued Amazon, accusing the $1.3tn ecommerce giant of illegally using monopoly power to overcharge consumers, hobble competitors and increasing fees to sellers on its marketplace so that it extracts almost half of every dollar they make. Here’s more on one of FTC chair Lina Khan’s biggest tests in her fight against Big Tech.

2. Exclusive: Olympique Lyonnais is seeking to raise about €300mn from the bond market and is selling some of its assets including a new 16,000-seater arena as the French football club’s US owner looks to reorganise its finances following last year’s record-breaking takeover. Read the full story.

3. McKinsey will pay another $230mn to settle most of the remaining claims related to its work to “turbocharge” opioid sales, bringing the total it has paid out for its alleged part in the US overdose epidemic to more than $870mn. The agreement with a host of cities, counties and school districts must be approved by a court in the coming months. Here’s more on the consultancy’s settlement.

4. Exclusive: China’s effort to raise Rmb300bn ($41bn) for its chips industry is struggling due to sluggish recovery in the world’s second-largest economy, according to people familiar with the situation. Beijing recently approved the third and most ambitious funding round yet for the China Integrated Circuit Industry Investment Fund. Here’s how the country’s economic slowdown is impacting the funding push.

• Chinese batteries: Morocco has emerged as an unlikely winner from geopolitical tensions as China’s battery companies look to overcome hurdles in supplying western markets.

• Chinese economy: Beijing must make revolutionary changes in income distribution and government priorities to avoid the Japan trap, writes Martin Wolf.

5. Donald Trump orchestrated a “persistent and repeated fraud” with his oldest sons and his business organisation in which they vastly inflated the value of properties in Manhattan and Florida, as well as golf courses in the US and Scotland, a New York state judge ruled yesterday. Here’s how the ruling affects the former US president and his business empire.

• Opinion: What should the world expect from a second Trump term? An egoist’s actions are unpredictable, but some things seem probable, writes Janan Ganesh.

The Big Read

When lockdowns were lifted, executives at British engineering group Dyson took a granite-hard approach to calling staff back to work in the office. Interviews with 27 employees who have now left the company paint a picture of how senior staff at its UK campus upheld uncompromising restrictions, including rigorous monitoring and warnings of professional consequences. Here’s more on the company’s cultural divide over working from home.

We’re also reading . . . 

• Linda Yaccarino: The chief of Elon Musk’s X, formerly Twitter, tells FT Magazine in an exclusive interview why she took on the wildest job in Silicon Valley.

• UK farming: The government’s post-Brexit subsidy regime has left some farmers with less money than before and triggered a row over the industry’s future.

• JPMorgan Chase: Despite thinking it could win, the Wall Street bank’s decision to settle the Jeffrey Epstein lawsuits and not let them drag on makes sense, writes Brooke Masters.

• German politics: Far-right party Alternative for Germany has used a scuffle at a high school party to stoke anti-migrant sentiment in the town of Görlitz — and nationwide.

Chart of the day

Last month one of China’s most powerful oil executives caused a stir in markets with a stark prediction: that its oil demand may peak this year. While that may overstate the case, analysts agree that the country is nearing an inflection point that will reverberate across the industry.

Take a break from the news 

The late antiques dealer and interior designer Robert Kime once observed that an inevitable part of collecting is that it is often necessary to “sell something to get something better”. But where to sell your items, and how? FT fashion editor and collector Lauren Indvik lays out your options.

Additional contributions from Benjamin Wilhelm and Gordon Smith