In China, local regulators imposed a six-month business suspension and a record fine of 441 million yuan ($62 million) on PwC’s auditing unit in the mainland of this Asian country.
The mentioned impact measure is related to the audit of the troubled property developer China Evergrande Group, which collapse became a significant factor in the context of the launch of the crisis in the real estate market of the specified state.
On Friday, September 13, China’s securities regulator said that the results of its investigation indicate that PwC Zhong Tian LLP helped conceal and even facilitated the fraudulent actions of Evergrande in 2019 and 2020 as part of an audit of the annual performance indicators of the developer flagship onshore unit Hengda Real Estate.
In a statement released by the Securities Regulatory Commission of the Asian country, it is noted that PwC has seriously eroded the basis of law and good faith. Damage to the interests of investors was also mentioned in this case.
Chinese authorities began investigating PwC’s role in the accounting of Hengda Real Estate after the Securities Regulatory Commission accused the developer in March of fraud for $78 billion over two years through 2020.
It is worth noting that business suspension and a fine of 441 million yuan are the toughest sanctions that have ever been applied in an Asian country against an accounting company of the so-called Big Four. It is also noteworthy that these measures were announced at the time of the massive exodus of clients and layoffs at PwC. The company has been facing the corresponding state of affairs over the past few months.
As we have reported earlier, S&P Global Ratings Economist Says About China’s Ability to Deal With Property Crisis.
