Eileen Hoggett challenged the claim that she had kept and shared sensitive documents with colleagues
Eileen Hoggett, who was fired from Big Four firm KPMG in the light of recent whistleblower allegations, has filed an application for preliminary discovery in NSW Supreme Court, reported the Australian Financial Review.
KPMG had served Hoggett a letter of expulsion after allegedly keeping hard copies of documents listing private audit bids from rivals EY and PwC in her locker and sharing them with colleagues to secure audit contracts. KPMG chief executive John Sams told partners and staff that the firm discovered an email in which Hoggett referenced doing so.
At the KPMG ethics and accountability public hearing last month, Hoggett told the joint parliamentary committee on corporations and financial services that she did not remember keeping such documents in her locker and that her termination baffled her.
“I was out walking one morning and I received a call from the CEO, who advised that I was being expelled. I asked to understand the rationale and the reason for that, because that is unprecedented; it’s something that’s never occurred in our partnership before”, she said in a statement published by AFR. “I was told that it was a basis of an email that had been found in the week or so leading up to that, and I didn’t have the opportunity to have a discussion. Probably 20 minutes after that phone call, a letter of expulsion was served to my lawyer and a copy couriered to my home”.
Hoggett told the committee that due to being expelled from the firm, she had lost all the retirement benefits she was supposed to have earned during her 21-year tenure as a partner. She would have been entitled to millions under KPMG’s “good leaver” policy.
The policy stipulates that long-term partners may receive a one-time sum equal to one-fifth of the partner’s total earnings over their final five years on departure. The firm’s partnership deed also indicates that should the chief executive request a long-standing equity partner’s departure with the board’s approval, that partner would receive a “discretionary retirement payment” amounting to nine months of their final year’s salary, per AFR.
“Expulsion is something that’s unprecedented, so it was new to me. Expulsion means that I get no entitlements. I don’t get my accrued annual leave. I don’t get the retirement payment, which I contributed to as a partner for 21 years. I did not get paid for the last month up to the date of my expulsion, so it’s a significant financial penalty”, Hoggett told the committee in a statement published by AFR.
Hoggett is being represented by lawyer Bryan Belling. Both declined to comment, according to AFR.
ASIC is presently conducting an investigation into Hoggett and KPMG auditors for possible misconduct in the whistleblower scandal. The commission told the committee in a submission made last Thursday 3 September that the investigation was “well progressed, although the scope may evolve as further information is obtained and assessed”, per a snippet published by AFR.
Last month, general counsel Louise Capon departed KPMG after facing calls to resign due to her involvement in the scandal.
