PwC Pushes Back at Evergrande Letter

Dow Jones04-16

By Cao Li

PricewaterhouseCoopers has responded to a public letter that blamed some of its executives for the global accounting firm's exposure to China Evergrande, the fallen property giant.

PwC issued a statement on Tuesday after a letter circulated on Chinese social media over the weekend, which claimed to be written by some of the firm's partners. The letter alleged, among other things, that a former partner had raised concerns about Evergrande and suggested dropping it as a client, but a senior executive intervened.

PwC said "the letter contains inaccurate statements and false allegations concerning PwC and certain of our partners". The firm said it has reported the matter "to the relevant authorities" and reserves the right to take further action.

Evergrande, once one of China's biggest property developers, ran up more than $300 billion of liabilities before it defaulted in 2021. Its failure spread panic through bond markets, and ushered in dozens of other defaults from China's property sector. Last month, Chinese regulators said Evergrande had committed fraud, overstating its sales by around $78.4 billion between 2019 and 2020.

PwC resigned as Evergande's auditor in early 2023, in part because it wasn't able to get documents to support revenue recognition.

Write to Cao Li at li.cao@wsj.com

(END) Dow Jones Newswires

April 16, 2024 05:33 ET (09:33 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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