Chinese regulators have hit\u00a0PwC\u2019s auditing unit in mainland\u00a0China\u00a0with a six-month business suspension and a record fine of 441 million yuan ($62 million) over the firm\u2019s audit of troubled property developer\u00a0China Evergrande Group.<\/p>\n
Delivering a strong rebuke to the Big Four firm,\u00a0China\u2019s securities regulator said Friday that its investigation found that\u00a0PwC\u00a0Zhong Tian LLP helped cover up and \u201ceven condone\u201d\u00a0Evergrande\u2019s\u00a0fraud while auditing the annual results of the developer\u2019s onshore flagship unit \u2014 Hengda Real Estate \u2014 in 2019 and 2020.<\/p>\n
\u201cPwC\u00a0has seriously eroded the basis of law and good faith, and damaged investors\u2019 interest,\u201d said the\u00a0China\u00a0Securities Regulatory Commission in a statement.<\/p>\n
Chinese authorities have been examining\u00a0PwC\u2019s role in the accounting of Hengda Real Estate since the CSRC accused the developer in March of a\u00a0$78-billion fraud\u00a0over a period of two years through 2020.<\/p>\n
The business suspension and fines are the toughest ever penalty received by a Big Four accounting firm in\u00a0China and come against the backdrop of an\u00a0exodus of clientele\u00a0and\u00a0layoffs\u00a0at the firm in recent months.<\/p>\n
The move is set to cloud\u00a0PwC\u2019s prospects in the world\u2019s no. 2 economy.\u00a0PwC\u00a0Zhong Tian, the registered accounting entity and the main onshore arm of\u00a0PwC\u00a0in\u00a0China, was the country\u2019s top-earning auditor in 2022, according to the latest official data.<\/p>\n
\u201cWe are disappointed by\u00a0PwC\u00a0Zhong Tian\u2019s audit work of Hengda, which fell unacceptably below the standards we expect of member firms of the\u00a0PwC\u00a0network,\u201d\u00a0PwC\u00a0network, the alliance of\u00a0PwC\u2019s global member units, said in a statement.<\/p>\n
The firm said that, as part of its \u201caccountability and remedial actions,\u201d\u00a0PwC\u00a0China\u2019s territory senior partner Daniel Li had stepped down and Hemione Hudson, the firm\u2019s global risk and regulatory leader, had taken over from him.<\/p>\n
The six-month business suspension was imposed by\u00a0China\u2019s Ministry of Finance. The ministry also imposed a fine of 116 million yuan ($16 million) on\u00a0PwC\u00a0Zhong Tian for its auditing failure of Hengda in 2018, according to an MOF statement.<\/p>\n
The CSRC said in a separate statement that it had confiscated\u00a0PwC\u00a0Zhong Tian\u2019s revenue involved in the Evergrande case totalling 27.7 million yuan and fined the unit 297 million yuan.<\/p>\n
\u201cPwC\u00a0has, to a certain extent, covered up and even condoned Evergrande\u2019s financial fraud and fraudulent issuance of corporate bonds,\u201d said the CSRC statement.<\/p>\n
\u201cIt (PwC) has to be severely punished according to law.\u201d<\/p>\n
Over the past few months, a growing number of Chinese clients, mainly state-owned enterprises and financial institutions, has been leaving\u00a0PwC, following the launch of the regulatory investigation into the firm.<\/p>\n
The firm had about 400 Chinese clients, listed at home or in offshore markets such as Hong Kong or New York, in March this year, including tech behemoths Alibaba\u00a0and Tencent.<\/p>\n","protected":false},"excerpt":{"rendered":"
Chinese regulators have hit\u00a0PwC\u2019s auditing unit in mainland\u00a0China\u00a0with a six-month business suspension and a record fine of 441 million yuan ($62 million) over the firm\u2019s audit of troubled property developer\u00a0China Evergrande Group. Delivering a strong rebuke to the Big Four firm,\u00a0China\u2019s securities regulator said Friday that its investigation found that\u00a0PwC\u00a0Zhong Tian LLP helped cover up […]<\/p>\n","protected":false},"author":27,"featured_media":48524,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[173,181,249],"tags":[],"class_list":["post-48523","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-crime","category-world-news"],"aioseo_notices":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/posts\/48523","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/comments?post=48523"}],"version-history":[{"count":1,"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/posts\/48523\/revisions"}],"predecessor-version":[{"id":48525,"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/posts\/48523\/revisions\/48525"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/media\/48524"}],"wp:attachment":[{"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/media?parent=48523"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/categories?post=48523"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/abujacityjournal.com\/livenews\/wp-json\/wp\/v2\/tags?post=48523"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}