PricewaterhouseCoopers’ troubles are now deepening in Hong Kong as the firm is wrestling with the consequences of its audits of China Evergrande Group.
Over the coming month, at least 10 partners in the city are poised to leave, adding to the 20 that have already exited the firm in the past six months, according to people familiar with the matter. On the Chinese mainland, some 77 partners have left their roles since December, according to filings with the unified supervision platform of the Chinese CPA profession.
Some of the partners are being let go because of business reasons while others are leaving voluntarily for early retirement or to join other firms, the people said, asking not be discussing confidential matters.
PwC declined to comment.
PwC China, locally known as Zhongtian, was fined 441 million yuan ($61.2 million) by Chinese regulators last year for its auditing work on Evergrande’s inflated financial reports from 2018 to 2020. The regulator also suspended the operations of PwC’s China arm for six months back in September.
PwC China’s revenue dropped about 11% to 6.3 billion yuan in 2024, according to its website.
The exits underscore that the firm is also feeling the pain in Hong Kong from its China woes. PwC Hong Kong and China are legally separate partnerships, but operate in collaboration and effectively share the profit and loss of the business together, the people said.
The firm has 220 mainland partners, according to the Chinese Institute of Certified Public Accountants as of June 2. It had 250 partners in Hong Kong as of Dec. 31, 2024, according to a person familiar with the matter.
Last year, PwC global sent Hemione Hudson, a senior partner from the UK, to head the region. The firm has over the past months conducted internal business reviews, aiming to streamline and consolidate, the people said.
Losing clients
PwC has grappled with retaining key clients in China since the Evergrande-linked probe. AIA Group Ltd. and Li Ning Co Ltd joined a slew of Chinese clients to drop PwC even after the ban ended.
Hong Kong’s market regulator, the Securities and Futures Commission, has switched its auditor from PwC to Deloitte, Hong Kong Economic Journal reported this week, citing unidentified sources.
Hong Kong’s audit regulator is still investigating PwC’s Hong Kong role in the Evergrande audit.
The firm also faces a lawsuit in Hong Kong filed by Evergrande’s liquidators as they try to recover investments in the failed developer. Evergrande defaulted in 2021 as China’s housing crisis began to spiral. The liquidators cited the accounting firm’s “negligence” and “misrepresentation” in the auditing work.
