PwC Hong Kong partners to miss payouts after Evergrande-linked sanction

PwC is canceling planned payouts for its Hong Kong partners in order to retain capital for company operations after facing massive financial penalties over its flawed audits of the property developer China Evergrande.

Partners will miss out on their remaining shares from the $2.2 billion sale of PwC’s global mobility business in 2022. Originally promised as distributions over a five-year period, payouts will now cease after three years. The remaining funds will instead be redirected back into the company.

This financial shift follows PwC’s agreement to pay HK$1.3 billion ($166 million) in fines and compensation. Hong Kong regulators found that PwC failed to properly verify records and “actively acquiesced to manipulation” by Evergrande during its 2019 and 2020 audits.

The Evergrande scandal has put immense pressure on PwC’s broader China operations, causing the firm to lose mainland clients. It is also facing ongoing litigation from Evergrande’s liquidators, who are attempting to recover more money for investors.

The firm declined to comment on internal financial matters but stated it remains committed to managing the business and investing for the future.

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