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Yahoo
3 days ago
- Business
- Yahoo
PwC partner exits amid repercussions from Evergrande audit
PricewaterhouseCoopers (PwC) is facing a deepening crisis in Hong Kong related to the audit of China Evergrande Group. In the coming month, at least ten partners are set to leave the firm, adding to the 20 who have departed over the past six months, reported Bloomberg citing people privy to the matter. This follows the exit of 77 partners from the Chinese mainland since December, as per the unified supervision platform of the Chinese CPA profession. Some partners are being let go for business reasons, while others are opting for early retirement or moving to other firms, the people stated. PwC China, locally called Zhongtian, was fined 441m yuan ($61.2m) by Chinese regulators last year for its audit work on Evergrande's inflated financial reports from 2018 to 2020. Additionally, the firm's operations in China were suspended for six months, starting in September 2024. Consequently, PwC China's revenue fell by about 11% to 6.3bn yuan in 2024. In March 2025, a Financial Times report revealed that PwC had delayed payments to recently retired partners in Hong Kong and mainland China, leaving multiple equity partners without their contributed capital. The firm's struggles are not confined to the mainland; they are also impacting its Hong Kong operations. Although PwC Hong Kong and China are separate legal entities, they collaborate closely and share business outcomes, said the people. As of 2 June 2025, PwC had 220 partners on the mainland and 250 in Hong Kong as of 31 December 2024. To address these challenges, PwC global sent Hemione Hudson, a senior partner from the UK, to lead the region. The firm has been conducting internal reviews to streamline operations, further reported the news publication citing the unnamed sources. Despite these efforts, PwC has found it difficult to retain key clients in China post-Evergrande probe, with AIA Group and Li Ning among those that have severed ties. PwC's Hong Kong role in the Evergrande audit is still under investigation by the audit regulator. The firm is also facing a lawsuit in Hong Kong from Evergrande's liquidators, who are seeking to recover investments following the developer's default in 2021. The liquidators have accused PwC of "negligence" and "misrepresentation" in their auditing practices. "PwC partner exits amid repercussions from Evergrande audit" was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Times
4 days ago
- Business
- Business Times
PwC troubles in China deepen with exit of Hong Kong partners
[HONG KONG] PricewaterhouseCoopers troubles are now deepening in Hong Kong as the firm is wrestling with the consequences of its audits of China Evergrande Group. Over the coming month, at least 10 partners in the city are poised to leave, adding to the 20 that have already exited the firm in the past six months, according to people familiar with the matter. On the Chinese mainland, some 77 partners have left their roles since December, according to filings with the unified supervision platform of the Chinese CPA profession. Some of the partners are being let go because of business reasons while others are leaving voluntarily for early retirement or to join other firms, the people said, asking not be discussing confidential matters. PwC declined to comment. PwC China, locally known as Zhongtian, was fined 441 million yuan (S$79 million) by Chinese regulators last year for its auditing work on Evergrande's inflated financial reports from 2018 to 2020. The regulator also suspended the operations of PwC's China arm for six months back in September. PwC China's revenue dropped about 11 per cent to 6.3 billion yuan in 2024, according to its website. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The exits underscore that the firm is also feeling the pain in Hong Kong from its China woes. PwC Hong Kong and China are legally separate partnerships, but operate in collaboration and effectively share the profit and loss of the business together, the people said. The firm has 220 mainland partners, according to the Chinese Institute of Certified Public Accountants as of Monday (Jun 2). It had 250 partners in Hong Kong as of Dec 31, 2024, according to a person familiar with the matter. Last year, PwC global sent Hemione Hudson, a senior partner from the UK, to head the region. The firm has over the past months conducted internal business reviews, aiming to streamline and consolidate, the people said. Losing clients PwC has grappled with retaining key clients in China since the Evergrande-linked probe. AIA Group and Li Ning joined a slew of Chinese clients to drop PwC even after the ban ended. Hong Kong's market regulator, the Securities and Futures Commission, has switched its auditor from PwC to Deloitte, Hong Kong Economic Journal reported this week, citing unidentified sources. Hong Kong's audit regulator is still investigating PwC's Hong Kong role in the Evergrande audit. The firm also faces a lawsuit in Hong Kong filed by Evergrande's liquidators as they try to recover investments in the failed developer. Evergrande defaulted in 2021 as China's housing crisis began to spiral. The liquidators cited the accounting firm's 'negligence' and 'misrepresentation' in the auditing work. BLOOMBERG
