PwC advised Lendlease on the billion-dollar tax scam which is now subject to Australian Tax Office audit. As Lendlease whistleblower Tony Watson fights the giant in court over his dismissal as a tax lawyer, documents obtained by MWM show Watson warned a PwC tax partner and group finance chief Tarun Gupta the tax scheme was a rort. Michael West reports.
In the week before Christmas in 2017, whistleblower Tony Watson met Tarun Gupta, then CFO of Lendlease, and Paul Abbey, a global tax partner of PwC. Watson explained to them in detail how Lendlease was breaching the tax laws on an aggressive retirement village deal. The ATO will not fall for it, he advised them subsequently by email.
The Tax Office did not fall for it. Although, in the face of exhaustive lobbying and butt-covering by PwC and Lendlease, the ATO has dithered on enforcing the law, it has told Lendlease their tax approach was wrong and is now albeit 6 years later auditing the company.
PwC was adviser to Lendlease on the scam, so its tax partner Paul Abbey should not have been surprised by anything said at that meeting. After the meeting, Watson wrote to Tarun Gupta and the Lendlease Board on 31 December 2017:
- Next steps
You will assess the immediate next steps after Paul Abbey reports back to you. I fear we have placed him in a difficult position..Paul Abbey will either have to call his own partner as having produced an incorrect opinion under duress, or himself embrace the hopeless tax claim that the law does not apply to reduce the cost bases by the deductions claimed. If he...