PwC may have a FCPA problem - The Communist Party China linked Top Group investment by PwC Australia and its partners can have consequences under US law

 by Ganesh Sahathevan 

FCPA

Like many other of the Big 4 accounting firms PwC which has its headquarters in the United States, structures itself in a way  that allows the firm to claim worldwide reach, but where national firms can claim to be independent of each other. KPMG tried that during the 1MDB  kleptocracy investigation , and PwC seems to be attempting the same to avoid any connection to the Australian tax scandal involving a number of Australian partners.  The revelation that the newly appointed CEO Kevin Burrowes received undisclosed payments from PwC International further complicates the effort.

 

 In the course of the media's investigation into PwC's tax scandal the ABC's Investigation Unit discovered that PwC and a number of its partners had acquired IPO shares in Top Education Group Ltd, an Australian company that was sought and was listed on the HKEX. Top was listed in early 2018, in what appears to have been a ramp and dump of the type known to attract the attention of Hong Kong's Independent Commission Against Corruption (ICAC). 

 

Top Group's listing was made possible only as a result of the company being granted what remains the first and only license to grant law degrees. The license was granted by the NSW Legal Profession Admission Board, at  a point which coincided with donations from that company, and its then owner, Zhu Minshen, to the NSW Liberal Party. Zhu Minshen has since passed away, but in 2016, just two years prior to the IPO, and 3 years before his license to grant law degrees was renewed, Zhu's role in influence peddling on behalf of the Chinese Communist Party was given a very public airing.

The chairman of the NSW Legal Profession Admission Board at all relevant times was the then Chief Justice Of NSW, Tom Bathurst AC KC, who has been recently appointed by Kevin Brookes to oversee his review of PwC's processes, which is supposed to address  the  failings in governance that led to the tax scandal.

 

The US Foreign Corrupt Practices Act   has broad application . PwC's attempts to distance itself from the tax scandal of its Australian operations do not appear to working, and the Top Group affair, condemned by Australia's Minister For Education Jason Clare involves  Australian public officials at very many levels of government.

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