china bans pwc for six months fines 56 million dollar

Taipei (Taiwan) . China has imposed a six-month ban on accounting firm PwC, which was involved in the audit of the collapsed real estate company Evergrande, and also imposed a fine of more than 400 million yuan ($56.4 million). This is the toughest action ever taken against any international accounting firm working in China. According to this directive, PwC will be barred from signing the financial results of any company in China for six months. This directive is a big blow to the audit company which is already losing its clients.

China’s Finance Ministry said in a statement on Friday that it was fining PwC 116 million yuan ($16.3 million) and confiscating its illegal profits, and also suspending it from trading for six months. The ministry has also issued an administrative warning along with the cancellation of PwC’s Guangzhou branch. China’s market regulator has also imposed a total of 325 million yuan ($45.8 million) in fines and confiscations on PwC for failing to take proper steps in auditing Evergrande.

After the world’s most indebted real estate company Evergrande collapsed in January, the Chinese government launched an investigation against its auditing firm PwC. The China Securities Regulatory Commission said in March that Evergrande had inflated its revenue by about $80 billion in 2019 and 2020. In May, authorities fined the company $577 million. PwC, one of the world’s leading accounting firms, had audited Evergrande’s accounts for 14 years and described it as healthy. China is cracking down on excessive borrowing against real estate companies during a prolonged sluggishness in the real estate market.

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