* New chair says first priority is to restore board

effectiveness

* KPMG Australia to accelerate CEO appointment process

* Appointment "doesn't pass any ethics test", senator says

By Renju Jose and Christine Chen

SYDNEY, July 2 (Reuters) - Embattled consultancy KPMG

Australia on Thursday named Michael Ebeid as its first

independent chairman, a move that drew criticism from lawmakers

over his connection with the firm and its response to an audit

leak scandal.

The appointment comes a week after KPMG said its chairman and

two senior partners would leave as part of a governance overhaul

to rebuild trust in the firm following allegations that staff

misused confidential client information to win audit work. The

CEO and audit boss also resigned in May.

"Despite the challenges the firm is facing, my resolve to

support its important work is even stronger. I believe KPMG can

recover, rebuild and emerge a better firm," Ebeid said in a

statement.

He said his mandate was to strengthen independent oversight,

make integrity central to everything the firm does, and drive

cultural and governance reforms needed to build confidence.

"My first priority is to restore the governance and

effectiveness of the board," Ebeid said.

The new chairman said KPMG would also accelerate its CEO

appointment process, expecting the board to confirm a new leader

before the end of July.

Ebeid, a former boss of public service broadcaster SBS, was

first named as an independent adviser to the firm's national

board in 2024 and has been on the Asia-Pacific board since 2025.

He was one of the current and former employees called to testify

before a parliamentary committee hearing held into the scandal

last month.

EMAILS SHOW EBEID CRITICISED SENATOR OVER SCANDAL

The audit leak scandal went public in March when Deborah

O'Neill, a senator from the ruling Labor Party, used

parliamentary privilege to raise the issues a whistleblower, a

former senior executive, took to the company in 2024.

They included that staff misused confidential board papers

from real estate company Lendlease ( LLESF ) to support bids for

major audit tenders.

Following news of his appointment, the parliamentary

committee released internal email correspondence involving

Ebeid, saying it offered an insight into his views on the

whistleblower's allegations, and that publication was in the

public interest.

In the email, sent after O'Neill made the allegations

public, Ebeid criticised the senator's actions as "very

inappropriate and unfair".

He also said many of her statements were "completely false",

including the timeline of events detailed by the whistleblower.

KPMG has since admitted mishandling the whistleblower's

complaint and launched a fourth investigation after three

previous probes did not substantiate any wrongdoing.

APPOINTMENT 'DOESN'T PASS ANY ETHICS TEST'

Barbara Pocock, a Greens senator on the committee, said

Ebeid's appointment was a "clear conflict of interest".

The email correspondence showed "his depth of knowledge and

pre-formed views about events within KPMG and its

whistleblower's allegations", Pocock said.

"Mr Ebeid's appointment shows the deeply embedded nature of

the cultural problems at KPMG, evident in the recent scandals.

It risks entrenching the very culture and leadership that need

to change," she added.

"This doesn't pass any ethics test."

KPMG did not immediately respond to an emailed request for

comment on the senator's statements.

Ebeid's appointment comes a day after Australia's centre-left

Labor government said it was considering breaking up the Big

Four accounting firms in response to repeated scandals in the

sector.

(Reporting by Renju Jose and Christine Chen in Sydney; Editing

by Chris Reese and Lincoln Feast.)