BEIJING (Reuters) – China’s finance ministry on Friday suspended PwC’s mainland auditing unit for six months over its audit of Evergrande, with the securities regulator saying PwC “covered up and even encouraged” fraud at the property developer.
The Chinese branch of PwC was also fined 116 million yuan (14.7 million euros) by the Ministry of Finance, according to a statement published on Friday.
In a second statement, the Chinese stock market regulator announced that it had imposed a fine of 297 million yuan and confiscated revenues from activities conducted with Evergrande, which totaled 27.7 million yuan.
The Finance Ministry added that it was “actively cooperating with Hong Kong authorities to investigate illegal activities” by PwC’s local branch.
“PwC helped cover up and even abet Evergrande’s fraudulent practices. Its work was imprecise, on-site inspections ineffective, sampling inadequate and audit processes a formality,” the securities regulator said on Friday.
PwC did not respond to a Reuters request for comment.
Once a real estate giant in China, Evergrande was placed into receivership by a Hong Kong court in January. In March, the securities regulator accused the group of fraudulently issuing bonds worth more than €70 billion and illegally disclosing information.
(Written by the Beijing editorial team, by Corentin Chappron, edited by Sophie Louet)
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