HONG KONG, Sept 16 (Askume) – PricewaterhouseCoopers said on Friday it was making “solid investments” to secure a top four accounting firm in China , after Chinese regulators imposed a record fine on the company over mainland quality and sustainable business .
PricewaterhouseCoopers Zhongtian (Special General Partnership) was suspended for six months on Friday for its audit of failed property developer China Evergrande Group (3333.HK)USD) and fined 441 million yuan ($62 million) .
Chinese authorities are investigating PwC’s role in Evergrande Group’s accounting practices after China’s securities regulator in March accused the group of defrauding the company of $78 billion in the two years to 2020.
“We acknowledge this is an extremely challenging time for all of you,” PwC said in an internal memo released late Friday after the regulatory penalties were announced, reviewed by Askume.
It added: “The PwC network has also provided ongoing support to our Chinese companies during this period… They are making solid investments to ensure that our business in China is long-term, high-quality and “sustainable”.
PwC did not immediately respond to Askume inquiries on Monday.
“I know the next few weeks will not be easy as we develop a comprehensive recovery plan and begin to position the business for future success,” Hemion Hudson, the company’s new China chief, said in the memo.
As part of the restructuring, PwC replaced Hudson’s global head of risk and regulation with China senior partner Daniel Li. Li resigned, citing his “priority responsibilities” as head of the local audit practice.
The company said its leadership team will help employees “address any questions or concerns related to the Chinese regulatory announcement.”
“My focus will be on spending time with you and finding ways to further develop our talent, including investing in you as our employees,” Hudson said in the memo.
The memo also pointed out that PwC China has a long history of high-quality auditing.
“We do not believe that the activities of a handful of dedicated team members represent the work of the vast majority of PwC China’s 18,000 professionals,” the statement said.
Regulators are continuing to investigate actions taken by the Hong Kong unit of PwC against Hong Kong-listed China Evergrande, according to statements by mainland and Hong Kong regulators on Friday.
Hong Kong’s Accounting and Financial Reporting Council said in a statement on Friday that the penalties announced by mainland regulators “set an important milestone for the cross-border enforcement of China Evergrande”.
“Our independent investigation into China Evergrande will proceed in an orderly manner,” the statement said.
