The chief executive of Catholic Schools New South Wales, Dallas McInerney, has been sacked after appearing at a watchdog inquiry into allegations of corruption in the state's Liberal party. This was reported by Qazaqyia.kz citing The Guardian.

The NSW Independent Commission Against Corruption (Icac) is investigating the allegation that McInerney, who gave evidence to the inquiry this week and last week, arranged and approved illegal political donations from Catholic Schools NSW to lobbying companies controlled by conservative factional group the Reformers, under the guise of consultancy services.

McInerney, whose Liberal party membership was suspended after the announcement of Icac's inquiry, has insisted payments totalling $265,900 over four years were for genuine consulting work. On Wednesday, McInerney denied he performed a factory reset on a work phone and iPad over the weekend to wipe critical evidence.

McInerney, who is a factional ally of federal opposition leader Angus Taylor, has rejected that a message about a plan to "shake down Angus" referred to donations to the Reformers. Taylor is not named in Icac's allegations and has repeatedly denied making payments to the Reformers.

In a statement shared on Friday, Catholic Schools NSW said its board had "unanimously determined that there is a loss of confidence in Dallas McInerney's ability to lead the organisation into the future". "As such, the Board has now terminated Mr McInerney's employment agreement with Catholic Schools NSW," it said.

In a statement provided to the Sydney Morning Herald on Friday, McInerney said: "When the inquiry started I said I would privilege the position of the company before my own. That is why I stood aside. I note the inquiry continues its important work and we are months away from findings and conclusions. I will forever remain grateful for the opportunity to serve, and hope I have made some positive contributions along the way."

Interim CEO Peter Yates will remain in the role while a search process is conducted. The schools governing body said it would not make any statement about the inquiry or witnesses during public hearings, but said the allegations were of "deep concern" and it supported "an externally conducted review of CSNSW's operations."

On Wednesday, McInerney said he performed the wipe on his phone after his bank contacted him last Friday to tell him his account had been "compromised by an unknown merchant". He said he performed a factory reset on an iPad ahead of it being surrendered to Catholic Schools NSW, "in the realisation I'm not likely returning to the company".

Counsel assisting, Dr Peggy Dwyer SC, put to McInerney that the move was "a transparent attempt … to wipe evidence that would have been critical for this commission". McInerney responded that he had known about Icac's public inquiry "for almost seven or eight weeks". "Had I wanted to do any malfeasance of that nature, I would have had quite a runway to do that. What triggered it was a compromise on my banking alerted to me by the NAB [National Australia Bank], and I have the case file number for that. I can share that with the commission."

McInerney previously stood aside from his role as CEO of the governing body for 600 schools in NSW before the Icac hearings began "to allow the work of Catholic Schools NSW to continue its important mission", he said in a statement. He was appointed as the inaugural CEO of the organisation in 2017.

On the inquiry's first day, Dwyer said it was not suggested that the schools governing body or its board were aware of the alleged actions by McInerney.

On Friday, former NSW Liberal minister David Elliott began giving evidence to the commission.

As part of its inquiry into allegations of corruption against figures associated with the NSW Liberal Party, Icac is investigating the allegation that Liberal operatives Christian Ellis, Jeremy Greenwood and Charles Perrottet took donations from fugitive property developer Jean Nassif in exchange for outcomes including damage to Elliott's career and the removal of the then-building commissioner, David Chandler.

On Thursday, the inquiry heard from NSW Liberal MP and former fair trading minister Eleni Petinos. She gave evidence that she may have been used by fellow Liberals, including former NSW MP Chris Spence and Charles Perrottet, to try to get rid of Chandler, recounting numerous attempts in 2022 to persuade her he was "dodgy" and should be sacked.

She told the inquiry her subsequent sacking by the Perrottet government in July 2022 – allegedly for bullying staff – was unfair and potentially motivated by her reluctance to sack Chandler.

On Friday, Icac announced its witness list for next week, including Spence, Chandler, Charles Perrottet and his wife, Anita Perrottet.