Hong Kong Court Keeps PwC in Evergrande Lawsuit

A Hong Kong court ruled that PricewaterhouseCoopers International Ltd. must remain a defendant in a multibillion-dollar lawsuit filed by the liquidators of China Evergrande. Deputy High Court Judge Patrick Fung rejected the auditing firm's request to exit the case, stating that the evidence provided by the firm was "inadequate and unsatisfactory."

Liquidators from Alvarez & Marsal are seeking 57 billion yuan ($8.5 billion) in damages, alleging negligence and misrepresentation in the auditing of Evergrande's financial statements from 2017 to 2020. The claim targets 38 billion yuan from PwC International and its affiliates, with an additional 19 billion yuan sought from the firm's Hong Kong and mainland Chinese entities.

The ruling establishes a legal precedent in Hong Kong that global firms may be held accountable for the work performed by their local affiliates in accounting fraud cases. This legal action is part of a larger effort to recover funds for creditors following the 2021 default of the property developer.