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PwC’s China unit faces record US$70 million fine, 6-month ban for Evergrande failures
- The penalty is expected to be announced by the end of this month, people familiar with the matter say
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China is preparing to penalise PwC with the biggest fine ever imposed on a global accounting firm for its shortcomings in the audit of bankrupt developer China Evergrande Group, including a ban on taking on new clients and signing off accounts of mainland-based companies, according to people familiar with the matter.
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PwC Zhong Tian could face a fine of up to 500 million yuan (US$70 million) and a six-month nationwide ban on doing business for its alleged failure in scrutinising the accounts of Evergrande in the years before its eventual collapse in January this year, the people said, declining to be named because the matter is private.
The penalty, expected to be announced later this month, will be the harshest imposed by the Ministry of Finance on an accounting firm. Big Four rival Deloitte’s mainland unit in Beijing was fined 212 million yuan in 2023 and suspended for three months from taking on new business.
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Still, the fine is smaller than the 1 billon yuan speculated in a Bloomberg report in June.
PwC Zhong Tian will not be allowed accept new clients for six months until February 2025, and cannot sign off on audit reports of financial statements or new listing reports for its existing customers, the sources said, adding that the ban would not apply to its taxation and consultancy services.
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