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Accounting and auditing
Business

PwC faces defections by Hong Kong, mainland China clients amid concerns about China Evergrande accusations

  • China Merchants Port Group joins at least four other large corporations opting out of working with the auditing firm in the last month
  • PwC’s troubles have worsened since a letter from whistle-blowers in April alleged it ‘turned a blind eye’ to developer’s misconduct

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The logo of accounting firm PwC is seen at its Berlin office. Photo: Reuters
Yuke Xiein Beijing

Shenzhen-listed conglomerate China Merchants Port Group has joined at least four other large corporations that have terminated contracts with auditing firm PricewaterhouseCoopers (PwC) in the last month amid concerns around possible malpractice tied to insolvent property developer China Evergrande.

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The Hong Kong headquartered port operator and shipping company said in a Wednesday stock exchange filing that its shareholders have decided to retract a proposal to hire PwC as its auditor for the year, citing “precautionary principles”.

Top retail lender China Merchants Bank, state-backed construction company China Railway Group, Shenzhen-listed Mindray Bio-Medical Electronics and Shanghai-listed Eastroc Super Drink have also scrapped plans to hire or ended contracts with the auditor this month, according to exchange filings.

PwC’s troubles have worsened since a letter from whistle-blowers in April alleged that the firm’s mainland China and Hong Kong branches “turned a blind eye” for more than a decade to the misconduct of property giant China Evergrande, which was ordered by a Hong Kong high court to liquidate in January.
The US firm vehemently denied the allegations and said it was taking measures to investigate the matter. Regulators in mainland China and Hong Kong also began looking into PwC’s practices tied to Evergrande.
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PwC declined to comment for this article.

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