Five key takeaways from parliamentary hearings into client leaks at KPMG | Business

1. KPMG partners plead forgetfulness

Two KPMG partners who quit over leaking client information fronted the inquiry, saying they didn’t recall key elements of the allegations.

A whistleblower has alleged that KPMG partners leaked board papers from a client, Lendlease, to benefit colleagues who were pursuing and eventually won Westpac’s lucrative audit contract.

Kim Lawry, the lead partner on the Westpac audit, admitted she shared a photograph of a Lendlease board document from her phone to colleagues.

Lawry said the document was not useful or relevant to the Westpac audit tender. She said she didn’t remember taking the photo, or knowing that it was a confidential document, or why the document would be worth recording.

Lawry had $19,000 docked from her bonus but said she didn’t expect KPMG would expel her.

Her colleague Eileen Hoggett, KPMG’s former chief operating officer, has not been so lucky.

Hoggett admitted that confidential Lendlease documents “were printed” and kept in her locker. But she said she did not recall doing this herself, or letting other people see the documents, or using them to win other contracts.

She was then read a 2023 email where she had suggested showing a colleague “the printed version in my locker … without letting too many people know [smiley emoji]”.

KPMG expelled Hoggett after the email was uncovered in July. Hoggett said the new chief executive, John Sams, rang her while she was out walking one morning, giving her “no opportunity to be heard or to have any discussion”.

“I am still trying to engage with the firm to ascertain, why they took that action, and I’m looking at all of my possibilities to explore that further,” Hoggett said.

2. Lawyers say KPMG staff misled them

One of KPMG’s top lawyers said his colleagues misled him when he tried to investigate leak allegations.

James McLelland, the firm’s deputy counsel, said he carried out an initial investigation in late December 2024 that was “fundamentally undermined” by his colleagues’ “misleading if not directly deceptive” answers.

In emotional testimony, he said events would have unfolded differently if his colleagues had answered honestly.

KPMG’s deputy chair, Carmel Mortell, said: “There’s two people that … did not tell the truth in their interviews and that is Ms Hoggett and it is Ms Lawry.”

3. KPMG is still ‘drip feeding’ news to leak victims

Top companies whose files were leaked said they had been forced to hold off on key decisions because KPMG has been slow to fill them in.

McLelland’s 2024 investigation and Allens’ report in December 2025 identified risks that client confidentiality could be breached, the inquiry heard.

Yet clients said they were not told about the issues until after federal Labor senator, Deborah O’Neill, made the allegations public in March 2026.

At Friday’s hearing, Westpac’s board audit committee chair, Michael Ullmer, accused KPMG leadership of “drip feeding” information.

Stephen Rue, chief executive of Optus, said KPMG only told him about the confirmed leaks in “vague” terms in a phone call on 29 May. Optus decided to keep its KPMG contract anyway as its financial year had already started on 1 April.

The Dexus chair, Warwick Negus, said KPMG executives told him “a little more” at every meeting he had with them, which he described as “very frustrating”. Dexus is yet to determine whether it will keep KPMG as its auditor.

“It’s been very difficult to make decisions because we never really knew whether we had all of the information,” Negus said.

Macquarie Group may have to drop KPMG as its incoming auditor, in part because so many people have left in the wake of its leaks scandal, the bank’s chair, Glenn Stevens, said.

4. More whistleblowers are coming forward

This inquiry started because a whistleblower raised concerns within KPMG for nearly two years and then took his evidence to the parliamentary committee.

O’Neill said: “There are many, many more who are contacting us and they are talking about a repeat of the same behaviour.”

Another senator, Barbara Pocock, asked about a separate, previous case of KPMG “silencing a whistleblower in an attempt to deal with allegations of wrongdoing by the firm”.

This person worked in its tax division, as first reported by the Australian Financial Review. The inquiry heard the claim was settled in late 2024, likely with a payment of about $500,000. The former chief executive Andrew Yates said the firm was unable to find enough information to investigate as the allegations mostly dated back 25 years.

5. Calls for reform growing

The Labor-led parliamentary committee is building a case to reform the audit and consulting sector.

Stevens, a former Reserve Bank governor, said Macquarie’s only auditor options were the big four firms: KPMG, PwC, EY or Deloitte.

Dexus’ chair, Warwick Negus, said his company had contracts with each of the big four simultaneously, meaning a change in audit would force them to change all the other contracts.

The Albanese government is considering options to improve the regulation of accounting, auditing and consulting firms in Australia. But as the committee has flagged, the government has yet to implement dozens of bipartisan calls for reform, including in the wake of the 2023 PwC scandal.

Westpac’s Ullmer said the government should be looking at stronger regulation and higher standards for partnerships, as well as requiring companies to tender audits every 10 years and swap auditors every 20 years.

“Now’s the time for a complete shift in this because of the matters that have come up through this committee,” Ullmer said.