Chinese authorities scrutinise PwC's role in Evergrande fraud case

Evergrande fraud case: Chinese regulatory authorities are investigating the involvement of London-based PricewaterhouseCoopers (PwC) in the accounting practices of China Evergrande Group, following accusations of a $78 billion fraud, according to a report by Bloomberg News on Friday.Sources cited in the report said that Chinese officials are examining the role of PwC in Evergrande's accounting practices, with particular focus on the company's former accountants who handled Evergrande's audit. However, no decision has been made yet on whether to penalise the auditor.The China Securities Regulatory Commission (CSRC) recently levied fines against Evergrande and its Chairman Hui Ka Yan, amounting to 4.2 billion yuan ($581.4 million) and 47 million yuan, respectively. These fines were imposed for accounting and bond issuance fraud. Additionally, Hui and other senior executives have been barred from the securities market.According to Hengda Real Estate, Evergrande's onshore flagship unit, an investigation by the CSRC revealed that revenue had been inflated by significant amounts in both 2019 and 2020. The probe found that revenue was overstated by 213.99 billion yuan in 2019 and 350 billion yuan in 2020. These falsified statements were used as the basis for issuing bonds.PwC resigned from its role as Evergrande's auditor early last year due to disagreements over matters related to the audit of its 2021 accounts, as confirmed by the developer.Furthermore, Evergrande and PwC have been under investigation by Hong Kong's audit regulator since 2021 regarding the developer's 2020 accounts.As the world's most indebted developer, with total liabilities amounting to $300 billion, Evergrande defaulted on its offshore debt in late 2021. Following unsuccessful restructuring negotiations with creditors over 18 months, the Hong Kong High Court ordered its liquidation in January of this year.(With Reuters inputs.)

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Chinese authorities scrutinise PwC's role in Evergrande fraud case

The Chinese regulator recently levied fines against Evergrande and its Chairman Hui Ka Yan, amounting to 4.2 billion yuan and 47 million yuan, respectively.

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