Allegro has already this year acquired listed law firm Slater & Gordon for $78 million and sold Pizza Hut to California’s Flynn Restaurant Group.
The turnaround specialist has amassed about $4 billion in assets under management and is known for having a high tolerance for risk related to the assets it buys.
Labor senator Deborah O’Neill during the estimates hearing on Tuesday. Alex Ellinghausen
In another notable transaction, in 2021 Allegro purchased Toll Group’s Global Express, and has since spent more than $100 million on rebuilding the company’s information technology system to guard against the risk of cyberattacks.
A spokesman for PwC said the firm would not “comment on market speculation”.
Key federal senators have reacted angrily to the development.
Labor senator Deborah O’Neill said PwC was once again putting “profit ahead of truth-telling” and repeated a call for the firm to identify all current and past personnel involved in the leak.
“If this potential deal is to be believed, it indicates that, yet again, PwC is putting its reputation and profit ahead of truth-telling,” Senator O’Neill said.
‘Profit ahead of truth-telling’
“The haste to deal with profit pain, as evidenced here, is at odds with the tardiness of a response to questions (by the Senate and the media) of probity, ethical failure and the multi-year cover-up they have enacted.
“Now more than ever it is vitally important that PwC immediately release the names and detail the involvement of all partners in this scandal. There is a real risk that individuals engaged in unprofessional and unethical behaviour and practices moving to competitor firms will carry contagion and further damage the audit, assurance, and consultancy industry.”
Greens senator Barbara Pocock said PwC’s leaders “seem more focused on protecting their financial interest than coming clean on past events”.
“We’ve seen it happen before; a new name, new structure, begin again, nothing to see here. A structural phoenix will not save PwC from responsibility or be a fast track to a new tranche of government contracts,” Senator Pocock said.
“That road is closed to those associated with PwC, I believe. By letting current PwC partners move on to new firms conducting the same business, there’s no evidence that the root cause of the problem has been addressed.”
She said that the firm needed to carry out “root-and-branch reform” before it can be allowed to win Commonwealth contracts again.
‘Strategic options’
“We are only a week away from being able to take this whole fiasco to the National Anti-Corruption Commission and that’s what the Greens will be doing on July 1 when the NACC opens for business,” Senator Pocock said.
“I think we need root-and-branch reform here and the only way forward at this stage is to hold a wide-ranging investigation to identify where the system has gone wrong so that we can put permanent fixes in place to ensure this kind of corruption is not allowed to happen again.”
The move to explore selling part of the firm was flagged by PwC in a message by acting chief executive Kristin Stubbins in a public letter at the end of last month.
Ms Stubbins said the firm would “ring-fence” the “provision of services to federal government departments and agencies” to prevent conflicts of interests.
“It will cover all services to federal government departments and agencies and include people, operations and governance within its perimeter and be operationally ringfenced from other businesses within PwC Australia,” she wrote on May 29.
As part of this process, she added the firm’s leaders would “consider strategic options for the business”. This is understood to be a reference to PwC seeking potential purchasers for the business.
PwC has been under fire since May 2 when emails released by the Senate showed multiple PwC partners received emails relating to a plan to exploit, for profit, information that former PwC tax partner Peter Collins had gleaned while advising the government on developing the multinational tax avoidance laws.
These revelations and the firm’s initial denial of the extent of the matter, led to the Department of Finance effectively banning PwC from winning any new contracts from the Commonwealth last month.
This has destroyed the value of the work the firm had been carrying out for the Commonwealth, services that were worth an estimated $537 million over the past two years.
It is not clear which parts of the business would be included in any transaction and if it would cover professionals working on state-based and other public sector work.
The scandal has so far triggered a Senate inquiry into consultants, an Australian Federal Police investigation into PwC, a re-examination of the leaks by the Tax Practitioners Board, a separate parliamentary investigation in the structure of the big four consulting firms, and a NSW upper house inquiry into consultants.
