As long as the question of whether PwC is responsible in the Evergrande case is not answered, it seems that this story will not have an end.
Chu Xiaoqiang丨Text
Evergrande has always been a "scar" that PwC can't get rid of. Almost all public opinion involving Evergrande can always bring out PwC.
Now, PwC, which can't bear to be bothered, has finally fought back.
After a few days after an open letter titled "Who Brought PwC into the Fire Pit of Evergrande?—— circulated on the Internet, PwC issued a "solemn statement" at about 7 a.m. on April 16 in response.
In a statement, PwC said, "Recently, it has come to our attention that an anonymous letter claiming to be 'a part of PwC partners' has been published and disseminated on certain social platforms or media. The anonymous letter contained false information about PwC and some of its partners, which was clearly contrary to the facts, seriously infringing on PwC's business reputation and legal rights, and causing a bad impact. ”
PricewaterhouseCoopers said it attaches great importance to this matter, has taken countermeasures, and will conduct an in-depth investigation into the matter.
Just a few days ago, the above-mentioned open letter about PwC was widely circulated online, and the payoff office appeared anonymously as "a part of PwC partners" and was dated March 2024.
In the open letter, the finger was pointed at PwC and PwC's China chairman, chief partner and chief executive officer, Zhao Baiji, saying that the ultimate responsibility for PwC's failure to audit Evergrande was Zhao Baiji.
The letter also revealed Zhao Baiji's salary, which receives an annual salary of up to HK$50 million from PricewaterhouseCoopers. Driven by the interests of pursuing high income for partners, Evergrande is a good customer.
The letter also pointed out that PwC has a "200 million club", with less than 10 people with Zhao Baiji as the core, and 200 million yuan is distributed from PwC every year. It is not surprising that the managing partner and his small gang once they have the highest goal of dividing the money, go to the fire pit of Evergrande.
However, judging from PwC's reaction, it believes that the contents of the above open letter are "false information" and contrary to the facts.
PwC claims that it "has reported the publication and dissemination of the letter to the relevant law enforcement authorities and reserves the right to hold those responsible for fabricating, disseminating and disseminating false information legally responsible." ”
Tracing the journey of PwC's partnership with Evergrande, PwC was its partner accounting firm when China Evergrande went public in Hong Kong in 2009. For many years thereafter, China Evergrande's audit reports were issued by PricewaterhouseCoopers.
Prior to Evergrande's investigation by Hong Kong regulators, PricewaterhouseCoopers (i.e. PricewaterhouseCoopers Hong Kong) also issued an unqualified audit report for Evergrande.
Although the cooperation between the two sides came to an end as early as a year ago (January 2023), PwC, which has served Evergrande for 14 years, has not been able to escape the "shadow" of Evergrande, and the question of whether PwC needs to be held responsible in the Evergrande incident has always been circulating on the Internet and major media.
Not long ago, the information about the CSRC's decision to punish Xu Jiayin and Evergrande spread. Because Xu Jiayin made decisions and organized the implementation of financial fraud, the methods were particularly vile and the circumstances were particularly serious. Xu Jiayin and Xia Haijun were banned from the securities market for life, and Evergrande Real Estate was fined 4.175 billion yuan, Xu Jiayin was fined 47 million yuan, and Xia Haijun was fined 15 million yuan.
According to the investigation by the regulators, the annual reports disclosed by Evergrande Real Estate in 2019 and 2020 inflated revenue by a total of 564.1 billion yuan. In the five bond issuance documents with a total of 20.8 billion yuan, Evergrande Real Estate cited the relevant data of the 2019 and 2020 annual reports with false records, which were suspected of fraudulent issuance.
PwC, as the auditor, issued a standard unqualified opinion on Evergrande's two annual reports. At that time, PwC emphasized in the audit report that "we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for the audit opinion." He also pointed out that it was independent of Evergrande Real Estate and fulfilled other responsibilities in terms of professional ethics.
Later, according to a number of media reports, professionals pointed out that the financial fraud involved in the case was huge, and if the intermediary serving Evergrande failed to "be diligent and responsible", it may be punished by the CSRC and bear joint and several civil liability.
Now, PwC is deeply involved in the whirlpool of public opinion of the Evergrande incident, which will ferment every once in a while, and it will become more and more intense, and the unbearable PwC no longer chooses to remain silent and begins to launch a counterattack against public opinion.
However, as long as the question of whether PwC is responsible in the Evergrande case is not answered, the story does not seem to have an end.