HONG KONG/BEIJING: China’s Ministry of Finance (MOF) on Friday imposed a six-month business suspension on PwC’s auditing unit in mainland China over its audit of troubled property developer China Evergrande Group, the regulator said.
The ministry also imposed a fine of 116 million yuan ($16 million) on PwC Zhong Tian LLP, the registered accounting entity and the main onshore arm of PwC in China, according to a statement on the MOF website.
China’s securities regulator said in a separate statement that it had confiscated the unit’s revenue involved in the Evergrande case totalling 27.7 million yuan and fined the unit 297 million yuan.
The investigation by the China Securities Regulatory Commission (CSRC) found that PwC Zhong Tian helped cover up and “even condone” Evergrande’s fraud while auditing the developer’s annual results in 2019 and 2020.
“PwC has seriously eroded the basis of law and good faith, and damaged investors’ interest,” the CSRC said.
Chinese authorities have been examining PwC’s role in Evergrande’s accounting practices since the securities regulator accused the developer in March of a $78-billion fraud over a period of two years through 2020.
