Lendlease boss Tony Lombardo and chair John Gillam appeared before a powerful federal parliamentary committee examining the actions of KPMG as part of its oversight of the corporate regulator in Canberra on Friday.
The firm, which has more than half a billion dollars in taxpayer-funded government contracts, is feeling the heat over the alleged misuse of confidential board papers and the treatment of a whistleblower who raised concerns.
In 2023, the whistleblower complained that audit team members had used information in the Lendlease board papers to tender for the auditing work of other corporations.
Mr Lombardo confirmed on Friday that in May 2025, he met with KPMG's then-Australia boss Andrew Yates, who raised the whistleblower matter.
"It was alleged that the whistleblower had information about the use of Lendlease's board papers and the allegation was around those documents being stored in an individual's locker," he told the committee.
Earlier this year, there was another meeting between Lendlease's chief financial officer and Mr Yates, who advised that the documents included a board committee scorecard of KPMG rivals PwC and EY.
KPMG has held the audit contract for Lendlease for 68 years, but it will be put out for tender next year once the current one is completed, which is likely at the conclusion of its first half accounts in early 2027.
"In terms of trust, it's led to the decisions we've had to make as a company around tendering the audit next year," Mr Lombardo said.
Mr Gillam added that it was "a very disappointing set of circumstances", and the board had made certain the current KPMG audit team is being led by someone "completely untainted" by the alleged events.
"What we're dealing with here ... is a few very senior people have had a grave misuse of the access privilege they have, and there's a fundamental breach of trust," he said.
In May, Mr Yates and audit head Julian McPherson, both of whom will give evidence on Friday, resigned over the whistleblower issue.
KPMG, one of the top four consultancies in the world, has set up a new independent review into its practices and apologised to the whistleblower.
The committee also heard Lendlease had asked KPMG for copies of internal and external investigations into the data leak.
"They've responded by maintaining that that information is in confidence, and so they haven't provided us that documentation," Mr Lombardo said.
"We were trying to make sure we understand exactly the use of our information through the allegations."
Earlier this week, KPMG knocked back a request from the committee for certain documents, citing confidentiality, professional privilege and the risk of prejudicing the "administration of justice".
Committee chair Deborah O'Neill sought advice from Clerk of the Senate Richard Pye about this and was told the parliament could investigate KPMG for potential contempt if denied further attempts to access the documents.
The scandal around KPMG has caused a political storm, given that it handles sensitive public service contracts for the federal and various state governments.
This week, the federal finance department placed a three-month moratorium on KPMG bidding for new contracts and committee member Barbara Pocock referred KPMG to the National Anti-Corruption Commission.
The government has 297 active contracts with KPMG valued at $653 million.
Some 35 witnesses will appear before the Joint Committee on Corporate and Financial Services, including 13 KPMG executives led by chair Martin Sheppard and interim Australia boss Stan Stavros.
