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Liquidators of China Evergrande Group have taken legal action against Hong Kong audit firm PricewaterhouseCoopers, accusing it of falsifying the real estate giant’s books, Bloomberg reported on Wednesday.
The move is part of efforts to recover creditors’ investments after a Hong Kong court ordered the liquidation of China’s former real estate giant Evergrande Group in January.
As Evergrande is based in mainland China, where local laws differ from those in Hong Kong, the group’s management said the court’s decision would not have any impact on its business in mainland China, and in fact, Evergrande is continuing its activities despite a debt estimated at more than $300 billion.
PricewaterhouseCoopers and PricewaterhouseCoopers Zhong Tian LLP, the audit firm’s mainland branch, were named in the lawsuit filed in March, Bloomberg reported, citing court documents. The legal actions target PricewaterhouseCoopers’ “negligence” and “misrepresentations” in Evergrande’s reporting of its financial statements for 2017 and the first half of 2018, Bloomberg reported.
Evergrande’s default in 2021 has become a symbol of the crisis in China’s real estate market.
Chinese and Hong Kong authorities are interested in PwC, which served as Evergrande’s auditor for more than a decade but resigned in 2023 over disagreements over its audit of Evergrande’s 2021 accounts.
PwC and Evergrande, whose shares have been suspended in Hong Kong since January, declined to comment.
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