PwC vows investment in China despite record fine

PwC is committed to making “tangible investments” to ensure the Big Four firm maintains a high-quality and sustainable business in China.

This statement was made in a memo to staff following a record penalty imposed by Chinese regulators on the company’s mainland unit last Friday.

PwC Zhong Tian LLP received a six-month suspension and a fine of 441 million yuan ($62 million) for its audit of China Evergrande Group.

Chinese authorities have been investigating PwC’s involvement in Evergrande’s accounting practices since March, when the developer was accused of a $78 billion fraud over a two-year period ending in 2020.

“We want to recognise that this has been an extremely challenging period for all of you,” said the PwC internal memo issued late on Friday after the regulatory penalty announcement, and reviewed by Reuters.

“I know that the coming weeks will not be easy as we put in place a detailed remediation plan and begin to position the business for future success,” the firm’s new China territory head, Hemione Hudson, said in the memo.

PwC has appointed Hudson, its global risk and regulatory leader, to replace Daniel Li as the senior partner for the China territory as part of its remedial actions. Li stepped down due to his previous role as head of the local auditing business.

The firm stated that its leadership team would assist staff in addressing any questions or concerns related to the recent Chinese regulatory announcements.

Attribution: Reuters

Subediting: M. S. Salama