Macquarie to Face Shareholders Seeking Answers on Scandal-Hit KPMG

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessMacquarie to Face Shareholders Seeking Answers on Scandal-Hit KPMGMacquarie Group Ltd. is set for another tough shareholders’ meeting this week, with its board expected to face questions over a decision to hire scandal-hit auditor KPMG Australia, the company’s culture and its exposure to fossil fuels.Author of the article:Richard Henderson and Amy Bainbridge You can save this article by registering for free here. Or sign-in if you have an account.bqmuoj2z]l{{nv[un2cszvap_media_dl_1.png Bloomberg(Bloomberg) — Macquarie Group Ltd. is set for another tough shareholders’ meeting this week, with its board expected to face questions over a decision to hire scandal-hit auditor KPMG Australia, the company’s culture and its exposure to fossil fuels.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountInvestors are likely to ask the Australian financial giant about the KPMG appointment, with the audit and consulting firm rocked by allegations it used confidential client information to win audit contracts. Even though shareholders will only be able to vote on the choice of KPMG at next year’s meeting, some are concerned about Macquarie’s move to award the lucrative contract, given one of its directors who previously worked for KPMG was involved in the process.“Given the current controversy with KPMG, shareholders need reassurance this auditor change is in the best interest of the company,” said Rachel Waterhouse, chief executive officer of the Australian Shareholders’ Association. She said concerns had been raised as far back as last year about “potential conflicts” in the appointment of the firm. CGI Glass Lewis, a governance firm, also said in a report that KPMG will be a point of contention this year, according to the Australian Financial Review. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe clouds over the July 23 meeting mark a fresh wave of scrutiny for Macquarie, just as it had sought to draw a line under past regulatory and risk issues including those involving short selling disclosures. Last year, Macquarie suffered a first strike against executive pay, dealing a blow to Chief Executive Officer Shemara Wikramanayake, whose pay got curbed due to the issues. The prospect of a second strike on Thursday would trigger a shareholder vote to disband the board, though that likelihood is low. A spokesperson for Macquarie declined to comment on the potential issues to be raised at the annual meeting. Besides KPMG, investors are also expected to prod the firm on the behavior of senior leaders in its dealmaking unit, after local media reports revealed letters sent by a group of staff to chair Glenn Stevens highlighting alleged shortcomings. The allegations included pressure to deliver optimistic projections within an infrastructure division and lax processes to treat internal complaints. Macquarie had declined to comment on the specific claims, but said to the AFR that “the material allegations were not substantiated.”“These revelations are clearly quite damning,” said Jun Bei Liu, lead portfolio manager of fund manager Ten Cap, which owns shares in Macquarie. Ten Cap wants to make sure Macquarie has “proper processes and procedures” to deal with the underlying allegations, including adequate whistleblower protections as “we expect a company like Macquarie to have a very high level of governance,” she said.The annual meeting comes on the heels of robust results for the year through March that delivered A$4.85 billion ($3.4 billion) in net income, exceeding estimates. The performance was buoyed by heightened energy market volatility that boosted earnings for its commodities unit. This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Separately, Australian Ethical, a pension fund that owns around A$170 million in Macquarie shares, filed resolutions ahead of the meeting to amend the company’s constitution and seek greater clarity on how it evaluates climate impact across business lines. “They had made a commitment back in 2021 to align their financing with the global goal of net zero emissions by 2050,” said Amanda Richman, the pension fund’s ethical stewardship lead. “That commitment was absent from its most recent reporting.” Richman said the resolution seeks to confirm whether they remain committed to aligning their financing with net zero by 2050, and also to disclose how they assess the alignment of their fossil fuel financing with that commitment.Macquarie’s board took issue with some of the assertions raised in the climate resolution and said it has had no lending or equity exposures to thermal coal since 2024. The board also said increases in the dollar value of exposures to oil and gas were in line with emission intensity targets set in 2022. It has recommended shareholders vote against the resolutions. Notwithstanding the issues, it’s been a strong year for Macquarie’s stock. It’s up about 25% and closed at a record on Friday before paring some gains this week.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.