This article is from the Australian Property Journal archive
LIQUIDATORS of China’s fallen property giant Evergrande are suing PwC, accusing it of “negligence” and “misrepresentation” in its work for the group.
Court documents obtained by the Financial Times showed the legal process against the PwC Hong Kong and the firm’s mainland China arm, PwC Zhong Tian in March. They do not detail a specific financial amount that the liquidators are suing for.
PwC is already awaiting penalties from Chinese authorities over its work for Evergrande, which was ordered into liquidation by a Hong Kong court in January, with a unprecedented crushing debt of US$300 billion that gave it the title of “world’s most indebted property developer”. It ran into serious issues in the wake of Beijing’s crackdown on loose lending practices to developers, and its defaulting on international debts in 2021 precipitated troubles throughout the country’s property sector and, ultimately, broader economy.
PwC had given Evergrande finances all-clear for more than 10 years before it collapsed.
Court proceedings have also been initiated by the liquidators against CBRE and advisory group Avista Valuation Advisory over valuation reports produced for Evergrande and subsidiaries in 2018.
Last week, its liquidators announced that in a bid to recover US$6 billion, legal action was being taken in Hong Kong’s High Court against billionaire founder Hui Ka Yan and his wife Ding Yumei, and three companies they control, as well as former CEO Xia Haijun and former chief financial officer Pan Darong.
Hui Ya Kan was detained by Chinese police and put under surveillance last year, while there were allegations that he attempted to assets offshore while the company struggled to finish projects.
In March this year, the founder was penalised $6.5 million for overstating Evergrande’s revenue by $78 billion. Chinese authorities took the additional steps to ban from Hui from running a company in China, for life.
Also last week, a Shenzhen stock exchange filing last week showed an Evergrande unit on the Chinese mainland had become the target of a liquidation petition, filed against Guangzhou Kailong Real Estate by Guangdong Vanward New Electric Co. Ltd. Kailong has a circa 60% stake in Hengda Real Estate, which is Evergrande’s main onshore property operation and has been investigated by regulators over alleged disclosure violations.
