Big Four auditor agrees to compensate shareholders after finding false financial statements.
The Securities and Futures Commission (SFC) has reached a settlement with PricewaterhouseCoopers Hong Kong (PwC HK) requiring PwC HK to set aside HK$1 billion to compensate eligible independent minority shareholders of China Evergrande Group, which is currently in liquidation. The SFC investigation found that China Evergrande's audited financial statements for fiscal years 2019 and 2020 contained materially false or misleading information, with revenue overstated by RMB213.9 billion (44.79%) in FY2019 and RMB350.2 billion (69.03%) in FY2020. The SFC determined that auditors were concerned in the disclosure of false information under section 277 of the Securities and Futures Ordinance. Compensation will be administered through an independent administrator, and intermediaries are reminded to assist shareholders in filing claims.
Sources
SFC Settles PwC for HK$1B Over China Evergrande Audit Failures
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