KPMG partners leaked client information and mishandled the whistleblower who raised the alarm, an inquiry has heard. Top global and Australian managers, three law firms and government regulators all missed the signs.

The firm has admitted unethical internal leaks but initially refused to hand over its investigations to regulators. Its London-headquartered international arm has issued a general apology but denied responsibility.

So, how did the failings come to light – and could more have been done?

What did KPMG do?

KPMG staff leaked confidential Lendlease and Optus information to colleagues who were applying for lucrative audit contracts at Westpac, Dexus and Telstra. At least three partners were involved.

The whistleblower raised alarm at colleagues’ behaviour in an email on 30 May 2024 to Julian McPherson, then the head of audit. The email alleged KPMG partners were pursuing “revenue growth at all costs”, alongside other workplace complaints, a parliamentary inquiry heard on Friday.

KPMG’s website says: “Acting with integrity is at the heart of our values and we all need to make the right decision by speaking up!!!”

The whistleblower told the inquiry that KPMG denied him a pay rise, withdrew his client work, then threatened to sack him.

KPMG’s former CEO Andrew Yates told the inquiry he initially focused on the whistleblower as an HR issue. McPherson denied threatening the whistleblower, saying: “I don’t recall that it was a definitive decision that he would be terminated.”

Both men said they had taken the allegations seriously and had believed they were responding appropriately. 

KPMG told the inquiry it never offered to pay for the whistleblower to get legal advice on his rights. Without legal protection, the whistleblower refused to provide identifying detail for his claims.

KPMG management said they repeatedly asked for more information on the allegations, even searching his computer to find evidence in November 2024. Yates said he did not then tell KPMG’s executive, instead awaiting an internal investigation, which failed to find evidence of wrongdoing.

In April 2025, independent board members were told there were specific allegations relating to specific companies. In May 2025, Yates told Lendlease about a leak allegation but said investigations had found no evidence.

Yates said he did not tell Optus, nor did he recall alerting Dexus or Westpac. KPMG only substantiated any of the allegations and alerted clients after Senator Deborah O’Neill raised the whistleblower’s allegations in parliament in March 2026.

Yates and McPherson have since resigned, acknowledging they mishandled the whistleblower’s complaints.

How did top-tier law firms respond?

KPMG brought in two top international law firms to investigate the whistleblower: the UK-headquartered Ashurst and the Sydney-based Allens, which told the inquiry it had a “long relationship” with KPMG.

Neither firm ever interviewed the whistleblower, the inquiry heard.

Ashurst initially looked into the whistleblower’s employment issues in February 2025, it told the inquiry. In June 2025, it gave KPMG advice on its internal investigation into the allegations.

In legal advice provided to KPMG in December 2025, Allens said it had found no evidence of the allegations.

In May, KPMG said the investigations had not been rigorous enough. It had asked Allens to investigate again in March after the claims became public.

Both firms have stood by the quality of their work and neither is accused of wrongdoing.

How was KPMG International involved?

KPMG International was the whistleblower’s next port of call.

KPMG’s global general counsel, Anne Collins, told the inquiry the whistleblower contacted the international team. The whistleblower told the inquiry Collins personally acknowledged his concerns by email in June 2025, then forwarded his email on to Freshfields, a London-based law firm.

The whistleblower said Freshfields later told him KPMG International was not aware of his concerns and had no authority to investigate the Australian firm’s conduct.

KPMG International, which includes Collins, denied wrongdoing and told the inquiry it took “reasonable and appropriate” steps. It said the whistleblower initially did not provide details of his allegations then, when he did, the global firm deferred to the Australian investigations on the belief the whistleblower had been invited to assist.

“KPMG Australia has acknowledged that its conduct has fallen short of the standards we hold ourselves to – and that the community at large expects – and we welcome the accountability that the Australian firm has taken,” the international firm said.

Gary Wingrove, KPMG International’s incoming chief executive and the former Australian CEO, has nonetheless apologised for the firm’s handling, saying: “I’m sorry, personally.”

Freshfields declined to comment, citing client confidentiality.

What was the Australian government’s role?

The Australian government has not ensured KPMG and other big partnerships are properly covered by company regulations, the corporate regulator has warned.

The Australian Securities and Investments Commission only began investigating the alleged KPMG failings in April, after they were made public, Sarah Court, Asic’s chair, told Senate estimates on 5 June. Asic lacks key powers to investigate and regulate partnerships directly and can only investigate registered company auditors, Court said.

Court told the inquiry that Asic should be given powers to investigate big partnerships – as it can for companies – and called for bigger penalties over breaches of the law.

She also called for more whistleblower protections to cover partnerships, as did KPMG Australia’s outgoing chair, Martin Sheppard.

An inquiry prompted by the PricewaterhouseCoopers tax leaks scandal recommended sweeping reforms in 2024. The government did not formally respond until February 2026 and did not adopt its recommendations.

In June, the government announced it would consider reform of partnership and whistleblower law. Consultation will continue until late July.

How did KPMG’s new management respond?

KPMG has been slow to give the inquiry and regulators full access to its investigations into the allegations.

On 19 June, Sheppard, KPMG’s chair at the time, told the inquiry the firm was claiming legal professional privilege and withholding the documents because they involved claims relating to people who may face criminal investigation. That evening, he relented.

KPMG then announced Sheppard would resign on 23 June. The interim CEO, Stan Stavros, said the change was necessary.

“We are determined to confront what went wrong, act transparently and ensure these failings are not repeated,” Stavros said.

But KPMG only shared with the inquiry committee some, not all, of the documents it requested, the committee said on Tuesday. Its chair, Senator O’Neill, said KPMG should also share the documents to Asic and the Tax Practitioners Board for their investigations.

KPMG did not comment when asked if it had shared the investigations with regulators or given the committee full access. Asic and the TPB did not comment on Friday when asked if KPMG had shared the documents.