The entrance to the Evergrande Palace residential complex of the Evergrande group, January 30, 2024 in Beijing (AFP/Archives/Pedro PARDO)
The Hong Kong regulator will open an investigation into the role of PwC in the accounting practices of Chinese real estate giant Evergrande, placed in compulsory liquidation and accused by China of major fraud.
Based in Foshan, southern China, Evergrande has been China’s largest real estate developer.
He accumulated debts until he had liabilities of more than $300 billion and thus became emblematic of the real estate crisis that has been plaguing the world’s second-largest economy for years.
Last month, the company was accused by Chinese authorities of inflating its revenue by $78 billion.
Auditing giant PwC was Evergrande’s auditor for more than a decade, before resigning from the position last year due to disagreements over the audit of Evergrande’s 2021 accounts.
The Hong Kong Accounting and Financial Reporting Board said Friday that a “whistleblower” letter had come to its attention.
She expressed “concerns regarding alleged failings” on the part of PwC, having affected the “quality of the audits of the Chinese group Evergrande”, he said in a press release.
“Given the seriousness of these allegations and the need to preserve the interests of investors, (the regulator) sees itself obliged to open an investigation,” according to the same source.
The announcement of the opening of this investigation comes after the disclosure last week of an anonymous letter which was condemned by PwC, criticizing “inaccurate statements and false allegations”.
The logo of Chinese real estate giant Evergrande on apartment buildings in Nanjing, eastern China, January 29, 2024 (AFP/Archives/STRINGER)
AFP was unable to verify the identity of the author of the letter, nor the veracity of his assertions.
Last month, China’s regulator said it was considering a lifetime ban on securities market access to Evergrande Chairman Xu Jiayin over fraud.
In January, a Hong Kong court ordered the liquidation of Evergrande, a symbol of the woes of this key sector of the Chinese economy, but the group affirmed that it would continue its activities.
© 2024 AFP
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