Hong Kong’s High Court has blocked PwC International from withdrawing from a lawsuit brought by the liquidators of China Evergrande Group, opening the door for the accounting giant to face global liability over its role in auditing the property developer before its spectacular collapse.
The ruling means liquidators can continue pursuing claims alleging negligence and misrepresentation in PwC’s auditing of Evergrande’s financial statements from 2017 to 2020. The total damages sought come to roughly 57 billion yuan, or approximately $8.4 billion, with PwC International potentially on the hook for up to 38 billion yuan.
What the court actually said
Deputy High Court Judge Patrick Fung was notably unimpressed with PwC’s defense. He characterized the evidence the firm presented as “inadequate and unsatisfactory,” ruling that further discovery and a full trial are needed to resolve the matter.
PwC had argued that its Hong Kong and China affiliates were independent entities with no direct ties to Evergrande. The court wasn’t buying it.
