China Imposes Fines, Six-Month Ban on PwC Over Evergrande Illegal Auditing Work

China's Ministry of Finance on Friday imposed an administrative penalty of 116 million yuan (about 16.35 million U.S. dollars) and a six-month business suspension on PricewaterhouseCoopers (PwC), a global accounting firm, over its illegal auditing activities for property developer Evergrande Real Estate Group in 2018.

The penalties imposed by the ministry in accordance with the Law of the People's Republic of China on Certified Public Accountants, also include the confiscation of illegal gains and revocation of PwC's Guangzhou branch, and an administrative warning.

The Ministry of Finance has organized a special working team to conduct inspections on the practice quality of the Evergrande Group audit projects by PwC Zhong Tian LLP, the registered accounting entity and the main onshore arm of PwC in China, and its Guangzhou branch since January this year.

Regarding the responsibilities of PwC Hong Kong in providing audit services to Evergrande Group, the Ministry of Finance will actively coordinate and cooperate with the Hong Kong Accounting and Financial Reporting Council to investigate and deal with related illegal acts through the cross-border audit supervision cooperation mechanism.

Meanwhile, the China Securities Regulatory Commission on Friday announced an administrative penalty on PwC for failing to live up to its obligations in auditing annual reports and bond issuance of the Evergrande Group.

The commission announced the confiscation of PwC's revenue of 27.74 million yuan related to the Evergrande audit case and a fine of 297 million yuan, bringing the total to 325 million yuan.