PwC’s China Woes Escalate Amid Mass Exit of Hong Kong Partners

PricewaterhouseCoopers LLP (PwC), one of the world’s leading professional services firms, is witnessing a fresh wave of internal upheaval as troubles linked to its past auditing of China Evergrande Group continue to unfold. 

The repercussions are being felt strongly in Hong Kong and mainland China, where the firm is dealing with partner exits, regulatory scrutiny, and client losses. The impact of its controversial audits is now spreading beyond the mainland, threatening PwC’s standing in key regional markets.

Wave of Partner Departures in Hong Kong and Mainland China

Over the coming month, at least 10 partners in Hong Kong are poised to leave PwC, adding to the 20 who have already exited the firm in the past six months, according to people familiar with the matter. 

On the Chinese mainland, 77 partners have departed since December, as per filings with the unified supervision platform of the Chinese CPA profession.

According to Economic Times, some of the partners are being let go due to business reasons, while others are choosing to leave for early retirement or to join other firms. PwC declined to comment on the matter. PwC China, locally known as Zhongtian, was fined 441 million yuan ($61.2 million) by Chinese regulators last year for its auditing of Evergrande’s inflated financial statements between 2018 and 2020.

The regulator also suspended the operations of PwC’s China arm for six months in September. The firm’s revenue in China dropped by around 11% to 6.3 billion yuan in 2024, as per figures published on its website.

Client Losses and Regulatory Pressure Intensify

PwC has struggled to retain key clients in China in the wake of the Evergrande-linked investigations. Prominent firms such as AIA Group Ltd. and Li Ning Co Ltd have ended their relationships with PwC, even after the regulatory ban on the firm was lifted. According to the Hong Kong Economic Journal, the city’s market regulator, the Securities and Futures Commission, has switched its auditor from PwC to Deloitte, indicating further reputational damage.

Meanwhile, Hong Kong’s audit regulator continues to investigate PwC’s local role in the Evergrande audit. Compounding the issue, Evergrande’s liquidators have filed a lawsuit in Hong Kong against PwC, citing “negligence” and “misrepresentation” in the auditing process. Evergrande had defaulted in 2021, triggering a wider housing crisis in China.

Read More: PwC Exits Multiple Countries Amid Scandals and Global Audit Failures.

Conclusion

As PwC contends with regulatory scrutiny, declining revenue, and a surge in partner and client exits, the repercussions of its involvement in the Evergrande audit continue to reverberate across Greater China. With ongoing investigations and legal proceedings still unfolding, the firm faces a prolonged period of uncertainty in one of its most important markets.

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