China Evergrande Group’s liquidators file lawsuit against PwC in Hong Kong, ET RealEstate
HONG KONG: Liquidators for China’s Evergrande have filed a lawsuit against PwC in Hong Kong for its role in auditing the debt-ridden real estate behemoth, according to a report Wednesday by Bloomberg News.
The lawsuit is part of an ongoing effort to recover creditors’ investments after a Hong Kong court in January ordered the liquidation of Evergrande, once China’s biggest real estate company.
PwC and PricewaterhouseCoopers Zhong Tian LLP — the mainland Chinese arm of the auditing firm were named in a lawsuit filed in March, Bloomberg reported based on court documents.
The lawsuit targeted PwC’s “negligence” and “misrepresentation” in connection to reports on Evergrande’s financial statement for 2017 and the first half of 2018, the report said.
Evergrande defaulted in 2021 and has become emblematic of a years-long crisis in China’s property market that had reverberated throughout the world’s second-largest economy.
Chinese and Hong Kong authorities are looking into PwC, which served as Evergrande’s auditor for more than a decade before resigning in 2023 amid disagreements over the audit of the firm’s 2021 accounts.
PwC declined to comment, while Evergrande did not respond to AFP’s request for comment.
Evergrande said earlier this week that its liquidators were seeking to recover about $6 billion in dividends and remuneration from seven people or entities, including its founder Xu Jiayin.
Xu’s “spouse or former spouse” Ding Yumei, former chief executive Xia Haijun and former chief financial officer Pan Darong were also named as defendants.
The legal actions against Xu and others were filed in March and recently made public following a court order.
Trading in Evergrande’s shares in Hong Kong has been suspended since January.
