SYDNEY (Reuters) - Australian investment firm Allegro Funds said on Tuesday it would set up an independent board to oversee PwC Australia's government practice business, which it bought last month, and committed A$100 million ($67 million) for transition costs.
PwC Australia on June 25 entered an exclusivity agreement with Allegro to sell its government practice for A$1 as it battles to contain a fallout from a scandal over the leak of confidential government tax documents.
The scandal, which broke in January, revolves around a former PwC tax partner who had been advising the federal government on laws to prevent corporate tax avoidance and shared confidential information with colleagues who then used it to pitch to multinational companies for work.
Allegro said it had reached a binding term sheet on the sale, with the new business to be called Scyne Advisory and fully independent of PwC. It will have about 1,750 employees.
An ethics subcommittee will also be created, chaired by a former judge of the Federal Court of Australia, to check on the probity of employees joining Scyne Advisory, as well as future conflicts and code of conduct.
PwC Australia said on Monday that it fired eight partners as part of an internal investigation into the leak. Former CEO Tom Seymour and the other seven partners named by PwC did not respond to requests for comment.
Members of PwC's government health infrastructure and defence, and trust and risk practices will lead Scyne Advisory in the short term, before a CEO search is conducted by the board and the leadership team appointed.
($1 = 1.4993 Australian dollars)