This article is from the Australian Property Journal archive
DEVELOPER Country Garden is the latest major Chinese company to cut ties with auditor PwC, which has lost more than 50 key clients since liquidators of fallen giant Evergrande sued it amid accusations of “negligence” and “misrepresentation” in its work for the group.
Country Garden said in a filing to the Hong Kong stock exchange that it had recommended PwC resign due to failure to release Country Garden’s 2023 full year financial results. PwC agreed to step down.
Country Garden shares have been suspended since April.
Country Garden is moving through an offshore debt restructuring after defaulting on $11 billion in offshore bonds last year.
“The group is actively pushing forward the holistic restructuring and working towards the resumption of trading in the shares…, and it is particularly important and critical to complete the audit of the consolidated financial statements …as soon as practicable,” it said, as reported by Reuters.
PwC has lost a roll call of major clients since it emerged that Evergrande’s liquidators legal had started the legal process against PwC Hong Kong and the firm’s mainland China arm, PwC Zhong Tian in March.
Bank of China, PwC’s largest mainland client, and a number of state-owned enterprises and financial firms are among the entitites that have ended their relationship with PwC.
PwC had given Evergrande finances all-clear for more than 10 years before the developer collapsed. The auditor 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 an unprecedented crushing debt of US$300 billion that gave it the title of “world’s most indebted property developer”.
Evergrande 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.
