Economy Auditor PwC threatened with temporary business ban in China
According to a newspaper report, PricewaterhouseCoopers Wirtschaftsprüfungsgesellschaft (PwC) is about to be banned from doing business in China for six months.
22.08.2024, 05:18
SDA
The penalty was triggered by errors in the audit of the insolvent Chinese real estate developer Evergrande. As the British newspaper "Financial Times" reported, citing PwC clients, they have been informed that the company is preparing for a temporary ban by the Chinese authorities. This could begin as early as September. In March, the Chinese stock exchange supervisory authority declared that Evergrande had inflated its own turnover by the equivalent of around 75 billion euros in the years before its collapse. Nevertheless, the PwC subsidiary in China had not objected to the company's balance sheets.
Bank of China turns away
The ban, which according to the newspaper may be accompanied by a heavy fine, would be the toughest measure that Chinese regulators have ever imposed on one of the major international auditing firms. It has also been announced that PwC has lost its largest ever contract from a listed company in China. The Bank of China (BOC) announced that it was changing auditors after many years of cooperation.
Real estate crisis weighs on the economy
PwC has assured its clients that its employees will continue to work during the lockdown and will be able to certify the 2024 annual reports once it is lifted in March. However, the ban would prevent PwC from approving financial statements, supporting IPOs and carrying out other regulated activities. The crisis at China Evergrande and in the real estate sector is weighing heavily on the Chinese economy. At the end of January, a Hong Kong court ordered the liquidation of the highly indebted group. Numerous other property developers are also in difficulties.
