PwC Lost Five China Clients After Evergrande-Linked Probe
PricewaterhouseCoopers LLP lost five Chinese clients in May alone, adding to a list of more than a dozen firms its stopped auditing in the country in the last two years.
China Taiping Insurance Holdings Co. said on May 27 it appointed KPMG as its auditor for 2024 after PwC retired, just as China Merchants Bank Co. replaced it with Ernst & Young.
China Railway Group, China Electronics Huada Technology Co. and Eastroc Beverage Group are among the others that changed auditors.
China Evergrande’s Alleged $78 Billion Fraud Is Among World’s Worst
The latest business losses underscore the challenges for PwC as regulators examine its auditing role for China Evergrande Group. The firm has come under intense scrutiny after China launched one of the biggest investigations into financial fraud in history.
The five companies contributed to about 107 million yuan ($14.8 million) in fees, based on their annual filings.
Authorities said Evergrande’s main onshore unit, Hengda, overstated its revenue by 564 billion yuan in the two years through 2020. Chinese government authorities are probing PwC’s involvement as a former auditor for the real estate giant, people familiar said in March. A representative for PwC declined to comment on Wednesday.
In recent years, PwC resigned as an auditor from at least 10 Chinese property companies, including Sunac China Holdings Ltd., Shimao Group Holdings Ltd., Sino-Ocean Group Holding Ltd. and Agile Group Holdings Ltd.
Photograph: Signage at the lobby of PricewaterhouseCoopers Australia office in Sydney, Australia, on Thursday, May 25, 2023. Photo credit: Brent Lewin/Bloomberg
Related: