Advertisement
What really powers the cloud? Behind every Google search, A...
A lot of what defines a home isn’t visible at handover. I...
Private equity has played a significant role in shaping Indi...
Luxury real estate is one of the most talked-about segments ...
Airports play a much bigger role than just enabling travel -...
China Evergrande’s liquidators have sought a judicial review of a HKD 1 billion (USD 127.67 million) settlement reached between Hong Kong’s Securities and Futures Commission (SFC) and PricewaterhouseCoopers (PwC) Hong Kong over the auditor’s work for the collapsed developer. The liquidators argue that the regulator did not have the legal authority to resolve a market misconduct claim against a non-regulated entity in the manner adopted. They also contend that compensating shareholders through the settlement could reduce funds available for creditors, adding another layer to the ongoing efforts to recover assets from one of China’s largest corporate collapses.
China Evergrande’s liquidators have moved to seek a judicial review of a HKD 1 billion (USD 127.67 million) shareholder compensation settlement agreed between Hong Kong’s Securities and Futures Commission (SFC) and PricewaterhouseCoopers (PwC) Hong Kong, according to a Bloomberg News report.
The compensation fund was established as part of an agreement reached in recent months between the regulator and PwC Hong Kong to resolve investigations into the firm’s audit work for Evergrande, the Chinese property developer whose collapse became a defining event in the country’s prolonged real estate downturn.
According to court documents cited in the report, the liquidators contend that the SFC lacks the statutory authority to settle a market misconduct claim against a non-regulated entity such as PwC Hong Kong in the way the regulator structured the arrangement. They are seeking judicial intervention to review the legality of the settlement.
The liquidators have also argued that directing funds toward shareholder compensation could negatively affect creditor recoveries. Their position is that the settlement may reduce the pool of funds potentially available for recovery efforts, leaving fewer assets for liquidators to pursue on behalf of creditors.
The latest challenge comes as liquidators continue efforts to maximise recoveries following Evergrande’s collapse. The company entered financial distress after defaulting on some of its offshore bonds in 2021, triggering a wider crisis across China’s heavily leveraged property sector. Its financial troubles eventually led to one of the largest corporate restructurings in the country’s history.
Evergrande accumulated more than USD 300 billion in liabilities before its collapse, making it the most prominent casualty of China’s property market downturn. The developer’s failure had far-reaching consequences across the housing market, financial institutions, suppliers, contractors and homebuyers, while also drawing increased scrutiny of corporate governance and audit practices in the sector.
Evergrande did not immediately respond to requests for comment on the matter.
Source Reuters
Advertisement
Facebook
Whatsapp
