China fines consulting firm $46 million for audit failures in Evergrande case

By Gokhan Ergocun

ISTANBUL (AA) - China has imposed a $46 million administrative penalty on consulting firm PwC for failing to meet its auditing responsibilities regarding the annual reports and bond issuance of Evergrande Real Estate Group.

The China Securities Regulatory Commission announced on Friday that it had confiscated 27.74 million yuan ($3.91 million) of PwC's revenue from the Evergrande audit and issued a fine of 297 million yuan ($41.87 million), bringing the total penalty to 325 million yuan ($45.8 million), according to state-run Xinhua.

The penalty stems from PwC’s failure to properly audit Evergrande’s 2019 and 2020 annual reports, during which the firm violated multiple auditing standards.

The commission said PwC failed to make correct professional judgments and did not detect significant financial fraud within Evergrande, one of China’s largest real estate developers.