China Fines PwC $62 Million for Botching Its Work for Evergrande

For years, the global auditing and consulting firm PriceWaterhouseCoopers was a dominant player in China, helping the country’s biggest companies reap big gains — enriching itself along the way.

Now, it has become ensnared in a sweeping crackdown by Beijing that imperils the future of its business in China.

The authorities on Friday suspended PwC’s operations in China for six months and fined it $62 million for its role in the sprawling financial misdeeds committed by China Evergrande Group, once China’s leading real estate developer.

The fine, issued by the Ministry of Finance and the China Securities Regulatory Commission, is the largest levied by the office. It is also the maximum amount that the Chinese regulator can fine an auditor.

PwC “knew that Evergrande Real Estate made material misstatements in its financial statements for the years from 2018 to 2020,” the finance ministry said in a statement, adding that the auditor also “failed to point them out, issuing an inappropriate audit opinion and a falsified audit report.”

In a statement, Mohamed Kande, the global chair of PwC, said in a statement that the work of its auditors in China was “completely unacceptable.” The company said it had cooperated with Chinese regulators and would comply with the penalties they imposed.

The firm fired six partners, along with other staff members, involved in the Evergrande audit work. “It is not representative of what we stand for as a network and there is no room for this at PwC,” Mr. Kande said.

PwC, one of the so-called Big Four accounting firms, has drawn attention this year as Xi Jinping, China’s leader, has called for financial oversight that has “teeth.”

In March, Chinese regulators fined Evergrande’s founder, Hui Ka Yan,