KPMG Australia has suspended participation in new Victorian government contract tenders until September 30 as investigations continue into allegations that confidential client information was improperly used to win audit and consulting work.
The firm has also agreed to withdraw from current Victorian government tender processes unless projects involve urgent operational requirements, specialist expertise or continuity of existing services. The move comes as the Victorian government reviews allegations surrounding the handling of sensitive client information by KPMG employees.
A Victorian government spokesperson described the allegations as a "serious matter" and confirmed that KPMG had voluntarily agreed not to participate in new procurement processes while authorities complete the ongoing review.
The latest restriction adds to a series of measures already affecting KPMG's government business across Australia. The firm has previously agreed to pause bidding for new government contracts with the Australian federal government, the Australian Capital Territory, New South Wales, Queensland and Western Australia until at least September 30.
According to Victorian government procurement records, KPMG currently holds contracts worth approximately A$24 million with state agencies and is involved in consortium projects with a combined value of about A$195 million. Existing agreements will continue, while participation in selected ongoing tenders will be permitted only where public services require immediate delivery or specialized capabilities.
The controversy intensified after KPMG acknowledged that former Chief Operating Officer Eileen Hoggett retained confidential board documents belonging to property developer Lendlease in her office locker, shared the documents with colleagues and later provided inaccurate information during internal inquiries.
The admission followed fresh evidence uncovered during the firm's internal investigation. Newly appointed Chief Executive John Sams confirmed that a partner had been expelled after investigators found confidential customer information had been stored in a locker at KPMG's Sydney office.
Sams described the conduct as "totally unacceptable" and said the firm had taken too long to uncover the full extent of the misconduct.
"I do not underestimate the task ahead but commit to our clients and people that I am prepared to be courageous, take the tough decisions and lead the changes we need to set us on the right path," Sams said.
The allegations first emerged in March after a whistleblower claimed confidential information obtained through audit engagements had been shared internally to strengthen bids for major audit contracts. The claims involve information linked to companies including Lendlease and Optus, while bids reportedly targeted major corporations such as Westpac, Dexus and Telstra.
The scandal has prompted sweeping leadership changes within KPMG Australia. Former Chief Executive Andrew Yates, the firm's audit head, chairman and several senior audit partners have all left the organization since the allegations surfaced.
KPMG is currently the subject of multiple investigations by the Australian government, the Australian Securities and Investments Commission (ASIC), the Tax Practitioners Board and Chartered Accountants Australia and New Zealand.
Australia's Department of Finance had earlier criticized the firm's handling of the allegations, stating that it became aware of some claims through media reports despite expecting direct disclosure from KPMG. The department warned that concerns over transparency could affect the firm's eligibility for future government work.
The ongoing investigations are also placing financial pressure on the professional services firm. Industry reports indicate KPMG has already reduced partner compensation by 20% and is considering additional workforce reductions as government restrictions and client departures affect revenue.
KPMG Australia employs around 9,000 people, including nearly 700 partners, and reported annual revenue exceeding A$2 billion in its most recent financial year. Long-time client Lendlease has announced plans to appoint a new external auditor, reflecting the broader impact the controversy is having on the firm's client relationships.
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