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Peggy Ye

The liquidators of China Evergrande Group are seeking 57 billion yuan (US$8.4 billion) from three PricewaterhouseCoopers (PwC) entities in one of the largest corporate lawsuit claims in Hong Kong, arguing the firm’s global coordinating arm assumed responsibility for audits linked to the collapsed developer’s accounting scandal.
Evergrande’s liquidators, Tiffany Wong and Eddie Middleton of Alvarez & Marsal, were pursuing the claim against PwC International, PwC Hong Kong and PwC China jointly, the High Court heard on Monday.
The court also heard an application by PwC International to be removed from the lawsuit before the main trial begins.
Deputy Judge Patrick Fung Pak-tung took submissions from both sides and was expected to hand down judgment within three months.
PwC International said it merely coordinated PwC’s global network from London and did not itself provide audit or advisory services. Its lawyers, led by Richard Handyside, said only PwC Hong Kong and PwC China carried out Evergrande’s audits and signed unqualified opinions on the developer’s 2017 to 2020 financial statements.
Handyside told the court that the Hong Kong and mainland China firms operated as independent member firms rather than subsidiaries of PwC International.
The defence counsel said there was a “complete absence of any exchanges” between PwC International and Evergrande, and the audit documents made “no reference” to PwC International having any operational role or involvement in signing off the accounts.

PwC International also argued that holding the global entity liable for the conduct of local member firms would effectively make it responsible for “every single audit” carried out by “every single PwC firm” worldwide, which would “not be fair”.
Counsel for Evergrande’s liquidators, Adrian Beltrami, rejected that argument, saying the case was based on PwC International’s “actual role and conduct”.
He told the court that the case involved one of the world’s largest property developers and what he described as a “very large, very publicly known and very dangerous audit”.
The liquidators alleged PwC International actively intervened in the audit process by issuing policies and participating in review exercises linked to Evergrande’s accounts over roughly 200 days to protect the global PwC brand, but failed to identify what Beltrami described as “serious deficiencies” in the developer’s financial statements.
The application is viewed as a preliminary step before the main proceedings can move forward. PwC Hong Kong and PwC China, the other defendants, were not involved in Monday’s hearing.
The case marks the latest development in the Evergrande saga, which left the once top-selling Chinese developer with more than US$300 billion in liabilities and triggered one of the country’s largest corporate debt crises.
Hong Kong regulators have already taken enforcement action against PwC over its audits of Evergrande.
Last month, the Securities and Futures Commission said PwC Hong Kong agreed to pay HK$1 billion (US$128 million) in compensation to minority shareholders of Evergrande over what the regulator described as serious breaches of auditors’ professional duties.
Separately, the Accounting and Financial Reporting Council fined PwC HK$300 million and imposed a six-month restriction preventing the firm from accepting new listed-company audit clients. Two former PwC partners were also fined HK$5 million each over the audits of Evergrande’s 2019 and 2020 accounts.
Mainland Chinese regulators previously fined PwC 441 million yuan and suspended the firm for six months over audit failures linked to Evergrande’s mainland units.
Hong Kong’s High Court ordered Evergrande to be wound up in January 2024, appointing Wong and Middleton as joint liquidators after the company failed to present a viable restructuring plan.
Evergrande founder Hui Ka-yan, once among China’s richest businessmen, pleaded guilty last month to charges including embezzlement and corporate bribery, according to the Shenzhen Intermediate People’s Court, which said it would deliver judgment later.


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PwC International seeks removal from case as liquidators press claims against global arm as well as the Hong Kong and mainland China units


PwC International seeks removal from case as liquidators press claims against global arm as well as the Hong Kong and mainland China units.


Evergrande liquidators seek US$8.4 billion from PwC entities in Hong Kong lawsuit

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}PwC International seeks removal from case as liquidators press claims against global arm as well as the Hong Kong and mainland China units

PwC International seeks removal from case as liquidators press claims against global arm as well as the Hong Kong and mainland China units