PwC Australia CEO Luke Sayers.
PPB Advisory CEO Daniel Bryant.
It may well come down to differing definitions of what constitutes a partner but however a firm structures itself, almost a third of PPB Advisory (PPBA) partners will no longer enjoy the cache the term confers once their company is formally absorbed into the professional services collectivate of PwC on August 1, 2018.
Sources revealed yesterday that while 30 of PPBA’s 33 partners will be moving to PwC, only 21 PPBA partners will retain the title of partner.
One Litmus staffer who wasn’t a partner previously will earn the title as a result of the takeover.
Further, the 21 constitute all but one of the 22 registered liquidators at PPBA, the exception firm founder Steve Parbery who isn’t going.
In essence, apart from the one individual from Litmus, only PPBA’s RLs will make partner at PwC.
That leaves a sizeable constituency of the aggrieved to be kid-gloved into the global behemoth’s financial advisory and consulting teams, and that’s without any challenges that might be present themselves as PwC sets about digesting the majority of PPBA’s 280 staff.
In a statement released to media on Monday and embargoed until midday yesterday the companies said most of the PPBA staff would move to PwC but at time of writing this report at least some PPBA staff who expected to go to PwC had not received firm offers of employment.
PwC Australia chief executive officer (CEO) Luke Sayers described the acquisition as reflecting the trend away from traditional forms of insolvency driven by banks installing receivers over the top of administrators appointed by directors.
“The need for businesses to be agile and move quickly to respond to changing market forces has never been higher,” Sayers said.
“In response, Boards are increasingly appointing advisers to help them restructure and rightsize their business for the future and ensure they are on a sustainable, competitive footing.”
PPBA CEO Daniel Bryant, who along with chairman Ian Carson is one of the 22 who’ll become partners at PwC, said joining the global firm would provide expanded opportunities for PPBA’s specialist expertise in restructuring in a local market now allowing for large scale restructures within the safe harbour legislative framework.
“We are delighted to be joining PwC and excited by the client service proposition our combined teams will create, both in the restructuring and transaction related services markets as well as management consulting,” Bryant said.
While the announcement formally confirms what the market has known since INO broke the news that a deal was imminent on March 28 in: Merger: PPB And PwC On Cusp Of Consummation?, there’s a mountain of work still to do identifying and sorting the conflicts that will inevitably arise as a company with thousands of audit clients attempts to swallow a bunch of registered liquidators who between them can probably boast several thousand insolvency appointments.
That work we understand has yet to advance to the point where lawyers can be engaged to prepare a court application seeking approval for mass resignations of liquidations, receiverships, voluntary and deed administrations on a scale we might not have seen before.
As for bankruptcies, INO doubts PPBA partners, RLs and trustees Andrew Scott and Mark Robinson will be giving up their many appointments and given that a search of AFSA’s register of trustees yielded no registered trustee currently working at PwC, then Scott, Robinson and Scott Pascoe look set to be re-introducing PwC to the personal end of the business.
Further reading:
Hi Peter
Another good article.
What is intriguing me is why another BIG 4 Firm is now getting back into the Insolvency space.
Sarbanes Oxley ( SOX) led to McGrath Nicol leaving KPMG. Kordas likewise with a tail wind from Andersons.
Why don’t the original Conflict concerns still apply now ?
Austin
Good work, Peter.
Any word on who it is that is becoming a PwC partner ? (I guess PwC will issue a listing of new partners soon enough…).
Can’t help but wonder what will happen to PPB’s forensic and valuations partners / teams. Not a bad opportunity for another firm (FH, McN, KM or some of the mid-tier firms) to pick up people who may not fit mold (or the billing targets) PwC requires of partners.
Are they employing Grant Sparks who signed off on David Leigh’s misappropriation of funds from Neolido Holdings account? Isn’t the use of the title ‘partner’ by PPB officers misleading conduct when PPB is a company and some only are actually directors? David Leigh used the position title of partner, but was not even a director. That misled clients. Is there an explanation (or financial benefit) for PPB misrepresenting itself as a partnership? Is PPB avoiding a probe into its files and structure after the investigation into David Leigh?