Deloitte Touche Tohmatsu chief executive Domenic Martino has quit his post, amid controversy surrounding his previous involvement with the failed junior telco, New Tel.
Mr Martino, who took on Deloitte's top job in May 2001, has been dogged by controversy surrounding his position as a director of New Tel and whether it was trading while insolvent before he resigned last year.
Deloitte has temporarily returned Mr Martino's predecessor and chairman Lynn Odland to the chief executive's post while it searches for a permanent replacement.
The chairman's job will be filled by Harley McHutchison.
In a statement, Deloitte said Mr Martino, who was also chairman of Sydney Gas Ltd, was leaving to “consider his future”.
“He cited as reasons for his decision to resign – the ongoing publicity associated with his past directorship of New Tel and his belief that it was good corporate governance and in the best interests of Deloitte and its people for him to step aside while New Tel's affairs were investigated during liquidation, a process that could take many years,” Deloitte said.
Mr Martino believed any future investigation of New Tel would show he “properly fulfilled his duties as a director” until he resigned in February 2002, 11 months before the telco went into liquidation, the company added.
In another twist, Deloitte has banned its partners and staff from holding directorships in public companies and, with limited exceptions, in proprietary firms.
The change is expected to affect about half a dozen of the company's staff.
“While holding directorships has been accepted practice in Australia for many years by legal, accounting and management consultants, Deloitte believes changing market attitudes towards corporate governance and our own commitment to best practice in governance globally, dictates a change in policy,” Mr Odland said.
Last Monday, New Tel's creditors voted to place the Perth company into liquidation amid concerns it was possibly trading insolvent for more than 12 months.
New Tel owes $40 million to $50 million to employees and creditors – including Optus, which appointed PricewaterhouseCoopers (PwC) as administrator in December.
New Tel shares were suspended from trading in October after it failed to lodge its audited annual accounts.