As PwC hired a Singaporean leader to steer its local firm through the consequences from a major scandal, PwC Australia on Sunday entered into an exclusivity deal with private equity firm Allegro Funds to sell its government practise for A$1.

The issue, which first surfaced in January, centres on a former tax partner at PwC who had been advising the federal government on legislation to stop corporate tax avoidance while also disclosing private information to colleagues who then used it to pitch to international corporations for business.

PwC said it had established an exclusivity agreement to exit its federal and state government business to Allegro Funds for A$1 ($0.67), as originally reported on Friday, amid a mounting backlash from important government clients.

According to a statement posted on the professional services company’s website, Allegro and PwC are hoping to reach a legally binding agreement within a month.

According to a source not licenced to communicate with the media, if the acquisition is approved, Allegro would establish the new company as a corporation rather than a partnership. Allegro and the former PwC partners would share ownership, though the source did not specify how exactly.

An Allegro Funds representative declined to comment.

According to PwC, the divestiture amounted to almost 20% of sales for the fiscal year 2023. In the most recent fiscal year, the company earned A$3 billion ($2 billion) in revenue.

“We have taken this step because it is the right thing to do for our public sector clients and to protect the jobs of the c.1,750 talented people in our government business,” said PwC Australia Board Chair Justin Carroll.

The agreement aims to protect the company’s government consulting business and reestablish trust with the numerous departments and agencies that have kept the company from receiving new contracts.

Deborah O’Neill, a senator for the Labour Party who assisted in last month’s release of a cache of internal PwC emails, said the company cannot “phoenix their way out” of the controversy until it discloses all of the information about those responsible for the breach of the secret documents.

“More of the same with a new name is still more of the same,” she said in a statement.

In a public statement, Global PwC Chair Bob Moritz expressed regret for PwC Australia’s failure to uphold the company’s standards and principles.

After moving to Sydney, Kevin Burrowes, who is now the Global Clients & Industries head, will take over as CEO.

Kristin Stubbins, the acting CEO, will hold the position until Burrowes gets there.

“PwC Australia has significant work to do and I am confident that the steps they are taking … will result in a stronger firm,” Moritz said.

(Adapted from USNews.com)