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A Hong Kong court has rejected PwC International’s request to be removed from a legal claim brought by the liquidators of China Evergrande Group. The liquidators are seeking 57 billion yuan (USD 8.48 billion) in damages from PwC International, PwC Hong Kong and PwC’s China arm over alleged negligence in auditing Evergrande. The court said PwC International owed a duty of care to Evergrande and that the case should proceed to trial, allowing further document discovery and questioning. PwC International disagreed with the decision and said it was reviewing its legal options.
A Hong Kong court has allowed the liquidators of China Evergrande Group to continue their claim against PwC International, rejecting the firm’s application to be excluded from the proceedings.
The liquidators are seeking 57 billion yuan (USD 8.48 billion) in damages from PwC International, PwC Hong Kong and PwC’s China arm, alleging negligence in the audit of Evergrande. PwC International could face a maximum liability of 38 billion yuan if the claim succeeds.
PwC International had argued during a hearing in May that it should not be included in the case. The firm said PwC Hong Kong and PwC’s China entity were not its subsidiaries and that it had no direct communication or relationship with Evergrande.
In its judgment, the Hong Kong court said PwC International owed a duty of care to Evergrande. Deputy High Court Judge Patrick Fung said the available facts were not complete and that further discovery of documents and interrogatories could provide more information about the case. He ruled that the liquidators should not be prevented from pursuing the claim without a trial.
The liquidators welcomed the decision but clarified that it does not determine whether their claims will ultimately succeed. They said they would continue investigating Evergrande’s affairs and pursue recoveries for creditors.
PwC International said it disagreed with the court’s decision while respecting the ruling. The firm said PwC International acts as the coordinating entity within the PwC network and had never provided services to Evergrande or maintained a relationship with the company. It added that it believes the claims against it have no merit and is reviewing the judgment and its legal options.
Evergrande was ordered into liquidation by the Hong Kong High Court in 2024 after the developer defaulted on most of its liabilities, which were estimated at around USD 300 billion. Edward Middleton and Tiffany Wong of Alvarez & Marsal were appointed as liquidators.
The latest court development comes as the liquidators continue efforts to recover assets for creditors following the property developer’s collapse. Evergrande’s debt crisis has become one of the most prominent cases in China’s property sector downturn, with the company’s liquidation proceedings extending across multiple jurisdictions.
Evergrande founder Hui Ka Yan was sentenced to life in prison by a Chinese court last week, with the court also ordering the confiscation of his personal property.
Source Reuters
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