PricewaterhouseCoopers LLP (PwC) is facing escalating turmoil in Hong Kong, as the global accounting giant grapples with the aftershocks of its controversial audits of China Evergrande Group, one of the country’s most high-profile corporate collapses.
At least 10 partners are expected to leave PwC’s Hong Kong office in the coming month, sources familiar with the matter said, adding to the 20 partners who have already exited over the past six months. The exodus marks a deepening of the firm’s internal crisis, which is being felt not only in mainland China but also across its regional operations.
The departures—stemming from a combination of voluntary resignations, early retirements, and business-driven terminations—underscore the widespread impact of the firm’s entanglement with Evergrande. In mainland China, filings show that 77 partners have stepped down since December.
PwC has declined to comment on the situation.
The fallout began in earnest last year, when Chinese regulators fined PwC China—locally known as Zhongtian—441 million yuan ($61.2 million) for failing to flag inflated financial statements from Evergrande between 2018 and 2020. The authorities also temporarily suspended PwC China’s operations for six months, dealing a significant blow to the firm’s reputation and client base.
Although PwC’s Hong Kong and China partnerships are legally distinct, insiders note that they operate closely and effectively share profits and losses across the region. The ripple effects have now reached Hong Kong, with the firm reportedly struggling to retain major clients and staff alike.
Adding to the pressure, PwC’s revenue in China fell about 11% in 2024 to 6.3 billion yuan, according to data published on its website. Meanwhile, its client list has thinned further. Prominent names such as AIA Group Ltd. and sportswear company Li Ning Co. Ltd. have reportedly severed ties with the firm, even after the regulatory suspension was lifted.
Hong Kong’s own Securities and Futures Commission has also moved to change auditors, switching from PwC to Deloitte, according to a recent report by the Hong Kong Economic Journal.
Regulatory scrutiny continues to mount. The Hong Kong audit watchdog is still investigating PwC’s local role in the Evergrande audit. Additionally, the firm is now facing legal action from Evergrande’s liquidators, who accuse PwC of “negligence” and “misrepresentation” in its audit of the now-defunct property developer. Evergrande defaulted in 2021, triggering a broader crisis in China’s real estate market.
In response to the crisis, PwC Global last year dispatched Hemione Hudson, a senior UK partner, to lead the Asia operations. Since then, the firm has launched internal business reviews aimed at streamlining operations and stabilizing its position in a rapidly deteriorating market environment.
As of June 2, PwC had 220 partners in mainland China and 250 in Hong Kong as of December 31, 2024. With further exits expected, those numbers may continue to shrink, further straining the firm’s ability to rebound from one of its most damaging professional scandals in the region.
