Lendlease criticises KPMG response to misconduct matter as 'piecemeal and sporadic'

Appearing before a Senate inquiry hearing on Friday, Lendlease chief executive officer Tony Lombardo and chair John Gilham have said they are "deeply discontented" by the misconduct by KPMG and also criticised the big four firm's response to the matter.

Lendlease told the Parliamentary Joint Committee on Corporations and Financial Services that when it sought copies of all internal and external investigations carried out by KPMG or its external advisers, it was denied this request, with the firm claiming legal professional privilege over the matter.

Lombardo said the response from KPMG regarding the matter had been piecemeal and sporadic, and that it can be difficult to get a full picture of what had occurred.

"It would have been great to be able to have received everything in a transparent way and as fast as possible. It's taken a few attempts to get to the bottom of the matter and get the full information on what's occurred,' he said.

Lombardo said Lendlease had held numerous meetings with KPMG regarding allegations of misuse of Lendlease's audit information. While the big four firm has responded at various points with further information, Lombardo said the information had been very piecemeal.

"As we've been gaining more information, we've learned more through the whole process," he said.

Senator Scarr said that Lendlease would never have become aware of the situation but for the whistleblower reaching out to Senator Deborah O'Neill and the parliamentary joint committee making a joint decision that O'Neill should air the allegations in a speech before parliament.

Lendlease made the decision following O'Neill's speech to discontinue KPMG's audit services.

Gilham said the situation had also caused disruption and additional cost for the firm.

"There are thousands of good people inside KPMG, let's be very clear about that, and what's apparent is that a few very senior people have made a grave misuse of the access privilege they have, and there's been a fundamental breach of trust," Gilham said.

"[The audit] is now led by someone who is completely untainted by any of this. We've made sure that there is no one under any investigation or anywhere near the investigation that's involved in our audit, and when our audit completes, which will be mid August in a couple of months' time, we will then formally start the process of talking to other firms to work out an appropriate timetable that doesn't disadvantage our security holders to change auditors."

Gilham said while it's unlikely that Lendlease will be able to change auditors before the half-year audit for the next financial year is completed, it will look to change audit firms as soon as it can.

"I doubt we'll be able to change before the half year audit for the next financial year is completed. So it's very likely that KPMG will do that work as well. Whether we can change before the 30 June 2027 year end or not is yet to be seen," he said.

"We don't feel that we should be disadvantaging our security holders because of what's occurred, but equally, this is a grave misuse of their access privileges, and we're deeply discontented with this behaviour. So, we will move as expeditiously as we can."