ASIC Launches Formal Investigation Into KPMG Australia Partners Over Client Data Misuse Allegations

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), has formally launched an investigation into three KPMG Australia partners following serious whistleblower allegations involving the misuse of confidential client information to secure major audit contracts.

ASIC Chair Sarah Court confirmed that the regulator initially opened a preliminary inquiry into KPMG in April. The probe was elevated to a formal investigation earlier this week after the unexpected resignations of KPMG Australia’s chief executive officer and audit chief.

According to Court, ASIC has already issued multiple compulsory notices to KPMG as part of its ongoing efforts to gather evidence. She stated that three registered company auditors are currently under investigation, though the scope could expand as additional information becomes available.

The allegations first surfaced in March when Australian Labor Senator Deborah O’Neill presented claims from a whistleblower in Parliament. The whistleblower alleged that confidential board documents belonging to property developer Lendlease were improperly used to support KPMG’s bids for lucrative audit contracts involving Westpac, one of Australia’s largest banks, and property group Dexus.

Among the individuals reportedly under ASIC’s scrutiny are KPMG partners Paul Rogers and Eileen Hoggett, both of whom were identified by the whistleblower as senior members of the Lendlease audit team. While Court confirmed their involvement in the investigation, she did not reveal the identity of the third auditor.

KPMG previously conducted an internal review of the allegations but said it found no evidence of wrongdoing. However, amid growing pressure, the firm has appointed law firm Allens to conduct an independent external investigation.

The controversy has also raised concerns about KPMG’s government contracts. ASIC CEO Scott Gregson said the regulator has sought assurances that individuals connected to the allegations are not involved in active contracts with ASIC.

Meanwhile, Reserve Bank of Australia Governor Michele Bullock indicated that the central bank is unlikely to renew KPMG’s contract to operate its whistleblower service. Another contract related to foreign employee recruitment is also expected to be retendered.

The investigation represents a significant challenge for KPMG Australia as regulators and government agencies increase scrutiny of corporate governance, audit integrity, and the handling of confidential client information.