Partner blew the whistle on KPMG five years ago. He knows why history has repeated

June 27, 2026 — 5:00am

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One of the most telling exchanges from KPMG’s disastrous turn at a Senate public hearing this month did not even concern the current whistleblower scandal that is tearing the multibillion-dollar firm apart.

Acting KPMG Australia chief executive Stan Stavros was asked about his actions in a wholly separate scandal from 2021 that involved many of the same characters. It provides an uncomfortable reminder that this has become a recurring issue for a profession that claims to offer scrupulous integrity to its clients from big banks to charities, the Defence Department to super funds.

In 2021, it was KPMG partner Brendan Lyon who blew the whistle on a now discredited multi-billion dollar NSW rail entity, called the Transport Asset Holding Entity, which would have artificially inflated the state’s budgets by billions of dollars by shifting the rail network’s costs onto the obscure holding entity.

In his submission to a NSW parliamentary inquiry in 2022, Lyon detailed the bullying, ostracism and the forced exit from the firm he said he had suffered after he refused to change his report’s conclusion that the TAHE transaction would be a disaster for taxpayers.

Former KPMG Australia boss Andrew Yates, who abruptly resigned last month amid a growing whistleblower scandal at the firm, gets significant mentions in the 2022 submission. As chief executive in 2022, it was Yates who was forced to admit that “we did not get everything right with respect to the TAHE engagements”. He said the firm was committed to “learning from any mistakes we may have made.”

The whistle that blew away KPMG’s aura as the guardians of financial credibility

But Stavros, who has succeeded Yates as chief executive on an interim basis, was Lyon’s boss as the TAHE scandal boiled over.

It meant there was no easy ride for Stavros at last week’s public hearing, where he faced questions about the TAHE saga.

“Brendan was part of my group … I provided him support in a way that I thought was appropriate. What has become clear is that that support fell short of what Brendan expected or needed, and I do want to take the opportunity to apologise to Brendan,” Stavros told the hearing last week.

And what could he have done differently? “Probably just … putting my arms around him, getting him out of that environment, bringing him to Melbourne to be with me. That’s just one of the things that I think of, senator.”

“Well, that’s all lovely,” responds Lyon, who claims at the time, he wanted more from Stavros to support him against reprisals from others. There is no suggestion Stavros was involved in the misconduct himself.

KPMG declined to comment........

© The Sydney Morning Herald