Chinese developer Country Garden drops PwC as its auditor
Country Garden drops PwC as its auditor, in another setback for the firm that has lost more than 50 clients this year.
Country Garden said in a Thursday filing to the Hong Kong stock exchange that it recommended PwC consider resigning as its auditor due to the firm’s failure to publish its financial results on time. PwC has agreed to step down; the resignation is effective Tuesday.
Country Garden, which is based in Foshan, has hired Hong Kong-based Zhonghui Anda CPA as its new auditor, which is effective from Thursday. Zhonghui Anda will be its auditor until the developer concludes its next annual general meeting.
In its resignation letter, PwC said it is waiting for Country Garden to provide a finalised consolidation scope and consolidated financial statements for last year. It also said it needs related work papers and supporting documents, as well as a cash flow forecast, among other things, to assess the company’s liquidity position.
The news came as Country Garden’s financial woes worsen, with contracted sales plunging 57 per cent year from a year earlier to 3.43 billion yuan (US$483.8 million) in August, following a 72 per cent decline in July.
In a statement on Wednesday, the developer told bondholders it would postpone coupon and principal instalment payments on nine notes for six months, citing insufficient funds due to plummeting home sales and restrictions on allocations of funds.
