PwC China Faces 6-month Business Ban over Evergrande Audit

The logo of Price Waterhouse Coopers is seen at its Berlin office in Berlin, Germany, September 20, 2019. REUTERS/Wolfgang Rattay/File Photo Purchase Licensing Rights
The logo of Price Waterhouse Coopers is seen at its Berlin office in Berlin, Germany, September 20, 2019. REUTERS/Wolfgang Rattay/File Photo Purchase Licensing Rights
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PwC China Faces 6-month Business Ban over Evergrande Audit

The logo of Price Waterhouse Coopers is seen at its Berlin office in Berlin, Germany, September 20, 2019. REUTERS/Wolfgang Rattay/File Photo Purchase Licensing Rights
The logo of Price Waterhouse Coopers is seen at its Berlin office in Berlin, Germany, September 20, 2019. REUTERS/Wolfgang Rattay/File Photo Purchase Licensing Rights

Chinese regulators will likely impose a six-month business suspension on a big part of PricewaterhouseCoopers' auditing unit in mainland China, as a penalty for its work on troubled property developer Evergrande, according to five sources with knowledge of the matter.

PwC Zhong Tian LLP, the registered accounting entity and the main onshore arm of PwC in China, is expected to be hit with the ban in its securities related business, affecting its work for clients including listed companies, IPO-bound companies and investment funds on the mainland, said the sources who declined to be named as the information was private, Reuters reported.

A fine of at least 400 million yuan ($56 million) is expected to accompany the six-month ban, three of the people said. Combined with the business suspension, it would be the toughest ever penalty received by a Big Four accounting firm in China, the three people added.

In the most recent case of a Big Four auditor being hit with hefty penalties, Deloitte's Beijing branch in March last year was fined 211.9 million yuan and the branch's operations were suspended for three months after serious deficiencies were found in its audit of China Huarong Asset Management.

The PwC penalties, which are being mainly handled by China's Ministry of Finance (MOF), the primary regulator of accounting firms in the country, are yet to be finalised, said one of the sources.

"Given this is an ongoing regulatory matter, it would not be appropriate to comment," a PwC spokesperson said in a statement.

The MOF did not immediately respond to requests for comment.

PwC has been under regulatory scrutiny for its role in auditing China Evergrande Group 3333.HK since the developer was accused in March of a $78-billion fraud. PwC audited Evergrande for almost 14 years until early 2023.

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Chinese regulators are expected to announce PwC's penalties in the coming weeks, three of the people said.

The Financial Times first reported on Thursday that PwC China expected a six-month business ban by Chinese authorities as early as September.

Bloomberg in May reported that the firm faces a record fine of at least 1 billion yuan ($140 million).

The looming PwC penalties have led to an exodus of clientele, opens new tab and prompted cost cuts, opens new tab and layoffs, opens new tab at the firm in recent months, sources have said, clouding the firm's prospects in the world's second-largest economy.

As part of the penalties, PwC would be barred from signing off on certain key documents for clients in mainland China such as results and IPO applications as well as from carrying out other securities-related services, the sources said.

The business suspension could also affect PwC Zhong Tian, as a whole, from taking on new state-owned or domestically-listed clients in the next three years, in accordance with Chinese regulations.

Last year, domestic regulators reiterated state-owned firms and mainland China-listed companies should be "extremely cautious" about hiring auditors that have received regulatory fines or other penalties in the past three years.

In the past few months, at least 50 Chinese firms, many of which are state-owned enterprises or financial institutions, have either dropped PwC as their auditor or cancelled plans to hire the firm, according to stock exchange filings reviewed by Reuters.

Its largest mainland China-listed audit client, Bank of China 601988.SS, said on Monday it plans to hire EY, opens new tab for its 2024 annual audit. In June, the bank stated that its service agreement with PwC would only be for the interim report review.

PwC Zhong Tian recorded revenues of 7.92 billion yuan in 2022, making it China's highest-earning auditor that year, followed by EY, Deloitte and KPMG, official figures show.



Foreign Start-ups Double in Saudi Market

Saudi Arabia’s LEAP conference becomes top magnet for tech start-ups
Saudi Arabia’s LEAP conference becomes top magnet for tech start-ups
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Foreign Start-ups Double in Saudi Market

Saudi Arabia’s LEAP conference becomes top magnet for tech start-ups
Saudi Arabia’s LEAP conference becomes top magnet for tech start-ups

The number of foreign start‑ups holding Saudi Arabia’s “Riyadi” entrepreneurship license has more than doubled to 550 by mid‑2025, up 118 % from the same period a year earlier, the Investment Ministry said.

The Riyadi permit lets overseas founders launch and scale technology and innovation‑focused companies in the kingdom. Officials say the surge reflects a government push to position Saudi Arabia as the Gulf’s start‑up hub by easing market entry and offering flexible regulation.

The General Authority for Small and Medium Enterprises (Monsha’at) has meanwhile issued 364 licenses for business incubators and accelerators, helping international entrepreneurs develop prototypes, find mentors and connect with investors.

Flagship tech gatherings such as Biban and LEAP in Riyadh – along with Saudi delegations to global events including Web Summit, VivaTech and Slush – have burnished the kingdom’s credentials as a magnet for venture capital and talent, the ministry said.

The momentum comes as Riyadh chases the economic‑diversification goals of its Vision 2030 plan. The government is targeting $100 billion a year in foreign direct investment (FDI) by 2030.

Overall investment licensing jumped 67.7 % last year. In the fourth quarter of 2024 alone, Saudi Arabia issued 4,615 licenses, up 59.9 % year on year.

Net FDI inflows moderated to 16.0 billion riyals ($4.27 billion) in the third quarter of 2024, 24 % lower than a year earlier but 37 % higher than the previous quarter’s 11.7 billion riyals ($3.12 billion), according to General Authority for Statistics data.

Saudi officials say the Riyadi license is integral to diversifying the economy, fostering innovation and embedding an entrepreneurial culture.