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The liquidators of China Evergrande Group are seeking 57 billion yuan (US$8.4 billion) from three PricewaterhouseCoopers (PwC) entities in one of the largest corporate lawsuit claims in Hong Kong, arguing the firm’s global coordinating arm assumed responsibility for audits linked to the collapsed developer’s accounting scandal.
Evergrande’s liquidators, Tiffany Wong and Eddie Middleton of Alvarez & Marsal, were seeking 57 billion yuan from PwC International, PwC Hong Kong and PwC China jointly, the High Court heard on Monday.
The court also heard an application by PwC International to be removed from the lawsuit before the main trial begins.
PwC International argued it merely coordinated PwC’s global network from London and did not itself provide audit or advisory services. Its lawyers, led by Richard Handyside, said only PwC Hong Kong and PwC China carried out Evergrande’s audits and signed unqualified opinions on the developer’s 2017 to 2020 financial statements.
The defence counsel stressed there was “the complete absence of any exchanges” between PwC International and Evergrande, and the audit documents made “no reference” to PwC International having any operational role and “did not contemplate” its involvement in signing off the accounts.
PwC International also argued that holding the global entity liable for the conduct of local member firms would effectively make it responsible for “every single audit” carried out by “every single PwC firm” worldwide, which would “not be fair”.
