(March 20): China Evergrande liquidators’ lawsuit to claw back funds from the builder’s auditors will finally reach its first public court hearing in May, about two years after being filed.
The parties in the case — China Evergrande Group (in liquidation) and PricewaterhouseCoopers International — will gather in the Hong Kong High Court on May 18, according to the court schedule on its website. The hearing will focus on whether PricewaterhouseCoopers International can strike out the claims, it said.
The case may reveal how far auditors can be held accountable for their work on insolvent companies accused of fraudulent accounting. Any financial ruling against PwC would intensify the regulatory pressure it already faces over its work with Evergrande.
Edward Middleton and Tiffany Wong of US turnaround advisory firm Alvarez & Marsal — acting as liquidators on behalf of Evergrande’s creditors — filed the case in March 2024 against PwC and the accounting firm’s mainland China arm, roughly two months after the defaulted builder was ordered to be wound up. The plaintiffs alleged “negligence” and “misrepresentation” in PwC’s auditing work on Evergrande’s past financial statements.
PwC and the liquidators didn’t immediately reply to requests for comment. PwC’s Chinese affiliate is not listed as a party for the May hearing.
The liquidators have been working to recover Evergrande-related assets, including dividends and remuneration from several defendants, among them founder Hui Ka Yan.
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Meanwhile, PwC continues to face scrutiny over its role in Evergrande’s accounting. In 2024, Chinese authorities suspended PwC’s operations in the country for six months and imposed a fine of 441 million yuan (US$64 million or $81.76 million).
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