Former SBS boss named KPMG chairman after humiliating week

Former SBS boss Michael Ebeid was successfully voted in as KPMG’s new chairman on Wednesday, but he will have little time to celebrate, with further public hearings on the whistleblower scandal scheduled for this Friday.

“We are pleased to advise that the partnership has voted in favour of both resolutions,” KPMG’s board told partners on Wednesday evening after the vote closed. Ebeid has been appointed for a three-year term.

KPMG’s 600 partners voted on two resolutions. The first was to change the constitution to allow a non-partner to be chairman, which requires a 75 per cent majority.

The second was to appoint Ebeid as the firm’s first non-executive chairman, which requires a 50 per cent vote in favour.

“The result paves the way for stronger governance of the firm and delivers on key commitments set out in our KPMG Australia Action Plan. Importantly, we can now appoint independent board members to our board injecting objectivity, stronger challenge and oversight,” the statement said.

Ebeid was brought in as the new face of the firm despite having been a board member for more than two years and being already negatively associated with KPMG’s inept handling of the scandal.

KPMG is grappling with the fallout from a whistleblower’s claims that it illicitly accessed sensitive board papers from its clients in a bid to win new business. Key claims made by the whistleblower have been substantiated, and a parliamentary committee is investigating how KPMG responded to the explosive claims. The next hearings are scheduled for this Friday.

All of KPMG’s other independent directors, including former NSW premier Mike Baird, have resigned from the board or are preparing to leave.

Ebeid was already in hot water soon after his appointment as chairman-elect when emails emerged from the parliamentary committee of him denigrating Senator Deborah O’Neill over her speech on the whistleblower claims in March this year, which first brought them to light.

His email claimed that “many of the statements she makes are completely false” and make the whistleblower’s exit “look like retaliation.”

As partners voted on his future over the past week, Ebeid issued a grovelling apology to O’Neill, which was published by the committee this week.

“My email was naive, embarrassing and wrong on every level,” Ebeid wrote.

On Tuesday, another two senior KPMG executives implicated in the whistleblower scandal resigned from the firm ahead of their appearances at another round of public hearings on the matter this Friday.

KPMG’s general counsel Louise Capon is resigning, as is HR boss Dorothy Hisgrove when a replacement is found.

Both Capon and Hisgrove were questioned at the previous public hearing into the scandal, which was held in June, and have copped criticism within the firm for being part of the team that dealt so disastrously with the whistleblower allegations.

There is no suggestion of wrongdoing by either Capon or Hisgrove, who are expected to depart with million-dollar-plus retirement packages.

Capon’s legal team commissioned the work by law firms Allens and Ashurst – which it characterised as external investigations – which KPMG used to back its claim that the whistleblower allegations had not been substantiated.

Ashurst told the hearing in June that its work for KPMG was legal advice, not an investigation of the claims.

Legal documents released by parliament on Monday showed that both Ashurst and Allens were prevented from taking basic steps, such as interviewing people involved or checking staff emails.

A subsequent investigation by Allens substantiated some of the core claims made by the whistleblower, and it triggered the immediate sacking of KPMG’s former chief operating officer Eileen Hoggett.

More to come

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