Liquidators of China Evergrande Group are suing PwC International, PwC Hong Kong and PwC Zhong Tian in Hong Kong’s High Court for about 57.9 billion yuan ($8.4B), alleging negligent and misleading audits of the collapsed developer’s 2017 to mid-2018 financial statements. PwC International tried to strike itself out of the case, arguing it never audited Evergrande and is legally separate from its member firms, but the court refused, holding it arguably owed a duty of care through its power to govern the network. The case is now heading toward a full trial on the merits.
LATEST DEVELOPMENT · AUG 26, 2026
On August 26, 2026, Deputy High Court Judge Patrick Fung refused PwC International’s bid to be removed from the case, finding its evidence inadequate and holding that the network body arguably owed Evergrande a duty of care because it could control its member firms, so the claim, about 57.9 billion yuan ($8.4B) against PwC Hong Kong and PwC Zhong Tian, of which about 38 billion yuan is also claimed from PwC International, proceeds to trial. The liquidators are separately seeking judicial review of the Securities and Futures Commission’s settlement with PwC Hong Kong.
BACKGROUND
China Evergrande Group was once the largest and most indebted property developer in China, defaulting on its offshore debt in late 2021 as part of a broader crisis in the Chinese real estate sector. The Hong Kong High Court ordered the company wound up on January 29, 2024, after years of restructuring talks failed, and appointed Edward Middleton and Tiffany Wong of Alvarez & Marsal as liquidators. In March 2024, the liquidators sued PwC International, PwC Hong Kong and PwC Zhong Tian LLP, the mainland China member firm, alleging negligence and misrepresentation in PwC’s audits of Evergrande’s financial statements for 2017 and the first half of 2018, statements that preceded the years in which Evergrande is alleged to have overstated sales and profits by tens of billions of dollars.
The liquidators are seeking roughly 57.9 billion yuan, about $8.4 to $8.6B depending on the exchange rate used, from PwC Hong Kong and PwC Zhong Tian, and about 38.1 billion yuan of that same claim from PwC International, the London-based coordinating entity for the global PwC network. PwC International argued it never audited Evergrande, had no contractual relationship with the company, and should be struck out of the case before trial, saying the PwC network is made up of legally separate member firms. The liquidators countered that PwC International sat atop the network and was responsible for setting and policing audit standards across member firms, so it owed Evergrande a duty of care.
On August 26, 2026, Deputy High Court Judge Patrick Fung Pak-tung rejected PwC International’s strike-out application, finding the evidence it submitted “inadequate and unsatisfactory” and ruling that PwC International arguably owed Evergrande a duty of care because of its power to control and govern member firms. The judge said unresolved factual disputes should be tested through discovery and cross-examination at trial rather than resolved on a preliminary application. All three PwC entities will now proceed toward trial together.
The lawsuit sits alongside separate regulatory action. Mainland Chinese regulators fined PwC Zhong Tian 441 million yuan and suspended it for six months in 2024 over the Evergrande audits, and PwC Hong Kong agreed in around April 2026 to pay HK$1.3B in fines and compensation to settle a Securities and Futures Commission investigation into its work for Evergrande. The liquidators are separately seeking judicial review of that SFC settlement, arguing it may shortchange creditors’ own recovery efforts.
TIMELINE
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AUG 26, 2026PROCEDURALCourt finds PwC International’s evidence inadequate, allows case to proceedThe Hong Kong Court of First Instance ruled that a strike-out application is a drastic remedy that should only succeed where a claim is unarguable, and held that factual disputes over PwC International’s control of member firms must be explored through discovery and cross-examination at trial.
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AUG 26, 2026JUDGMENTHigh Court refuses to release PwC International from the claim
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MAY 18, 2026HEARINGLiquidators quantify the claim at 57 billion yuan at a High Court hearing
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APR 2026SETTLEMENTPwC Hong Kong agrees HK$1.3B settlement with SFCPwC Hong Kong agreed to pay HK$1.3B (about $166M) in fines and compensation to settle the Securities and Futures Commission’s investigation into its Evergrande audit work, after regulators found serious breaches of professional duties.
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SEP 2024OTHERChina fines PwC Zhong Tian 441 million yuan over Evergrande auditsMainland Chinese regulators imposed a six-month suspension and a record 441 million yuan fine on PwC Zhong Tian, finding the firm turned a blind eye to Evergrande’s accounting lapses.
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AUG 7, 2024OTHERLawsuit against PwC becomes publicHong Kong court documents seen by Bloomberg reveal that the liquidators’ March 2024 negligence and misrepresentation claim against PwC entities had been filed and was now public.
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MAR 2024FILINGLiquidators commence negligence and misrepresentation proceedings against PwC entities
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JAN 29, 2024JUDGMENTHong Kong court orders the liquidation of China Evergrande Group