PwC Reportedly Flying In U.K. Senior Partner to Lead Embattled China Affiliate

00:00

00:00/00:00

Listen to this article 1x

Hemione Hudson

PricewaterhouseCoopers (PwC) is reportedly sending a senior partner from the U.K. to steer its affiliate in China amid mounting blowback from its auditing work for a major subsidiary of fallen real estate giant China Evergrande Group.

Hemione Hudson, PwC’s global chief risk and regulatory officer, is expected to head the crisis-hit China business, according to a Financial Times report Tuesday, citing sources familiar with the matter. The arrangement for Daniel Li, who just took the helm as PwC’s China chairman in July, is not yet clear.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

PwC is sending Hemione Hudson to manage its China affiliate amid criticism over auditing Evergrande.
PwC China lost major clients like Bank of China and faces a potential fine of up to 500 million yuan.
Evergrande allegedly inflated 2019 and 2020 revenues by $31 billion and $50 billion respectively; PwC faces reputational damage and legal actions.

AI generated, for reference only

Who’s Who

PricewaterhouseCoopers (PwC): PricewaterhouseCoopers (PwC) is one of the "Big Four" accounting firms. It faces a deepening crisis in China due to fallout from its auditing of Evergrande's subsidiary. PwC lost major clients like Bank of China and faces potential heavy penalties and operational suspensions. Hermione Hudson, PwC’s global chief risk and regulatory officer, will lead the crisis-hit China division.

Hengda Real Estate Group Co. Ltd.: Hengda Real Estate Group Co. Ltd. is a domestic subsidiary of China Evergrande Group. It was fined $577 million by the China Securities Regulatory Commission for fraudulent bond issuance and breaking information disclosure rules. The company inflated its revenue and profits in 2019 and 2020 significantly, exaggerating its figures by billions of yuan. PwC China had issued a clean audit for Hengda during those years, leading to reputational damage for the auditing firm.

Bank of China Ltd.: Bank of China Ltd. is one of China’s “Big Four” state-owned commercial lenders. Recently, PwC China lost Bank of China Ltd. as its largest client on the Chinese mainland amid the auditing firm's ongoing crisis related to its work with Evergrande’s subsidiary, Hengda Real Estate Group Co. Ltd.

PetroChina Co. Ltd.: PetroChina Co. Ltd. is one of the major Chinese companies that have terminated or planned to terminate their contracts with PwC China amid the auditing crisis surrounding the firm’s work for China Evergrande Group.

China Railway Group Ltd.: China Railway Group Ltd. is one of the major Chinese companies mentioned in the article that has terminated or plans to terminate its contract with PwC China. The company is part of the wave of departures from PwC China following the firm's involvement in auditing the financially troubled Hengda Real Estate Group Co. Ltd., a major subsidiary of China Evergrande Group.

China Merchants Bank Co. Ltd.: China Merchants Bank Co. Ltd. is one of the major Chinese companies that have terminated or planned to terminate their contracts with PwC China. This move follows the fallout from PwC's auditing work for Hengda Real Estate Group Co. Ltd., a subsidiary of China Evergrande Group, which was found to have engaged in fraudulent practices.

AI generated, for reference only

What Happened When