PwC invests in ‘high quality’ China business to ensure survival after US$62 million fine

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PwC Zhong Tian was hit with a six-month suspension and a fine of 441 million yuan on Friday over the firm’s audit of failed property developer China Evergrande Group

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A man walks by the audit firm PricewaterhouseCoopers (PWC) office, at the Fortune Financial Center in Beijing on August 27, 2024. Photo: AP.

Reuters

Published: 4:07pm, 16 Sep 2024

PwC is making “tangible investments” to ensure the Big Four firm has high quality and sustainable business in China, it said in a memo to staff after Chinese regulators on Friday hit the company’s mainland unit with a record penalty.

PwC Zhong Tian was hit with a six-month suspension and a fine of 441 million yuan (US$62 million) on Friday over the firm’s audit of failed property developer China Evergrande Group.

Chinese authorities have been examining PwC’s role in Evergrande’s accounting practices since the country’s securities regulator accused the developer in March of a US$78-billion fraud over a period of two years through 2020.

“We want to recognise that this has been an extremely challenging period for all of you,” said the PwC internal memo issued late on Friday after the regulatory penalty announcement, and reviewed by Reuters.

“The PwC network has also shown continued support for our China firm throughout this period … They are making tangible investments to ensure we have long term, high quality and sustainable business in China,” it said.

PwC did not immediately reply to Reuters’ query on Monday.

“I know that the coming weeks will not be easy as we put in place a detailed remediation plan and begin to position the business for future success,” the firm’s new China territory head, Hemione Hudson, said in the memo.