PwC delays payouts for departing partners in Hong Kong and China

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PWC has been delayed in the recent batches of retired partners in Hong Kong and the main mainland of China, where it moves in the financial repercussions from its failed role in reviewing Chinese real estate.

Four people are aware of this issue, that many of the stock partners who have retired in recent months have not yet been paid any of the capital they contributed when they joined the partnership.

The people said that the four major company had participated in the past in about half of the amount within months of retirement, with the rest at a later time. Recent changes determine the delay of the regular schedule for payment and will help the company maintain cash.

There is no suggestion that by taking more time to pay the money, PWC has violated its obligations towards the former partners under the shareholders’ agreement.

The delays come at a time when PWC is struggling with the financial consequences of its audits in Evergrande, which gave her a clean health bill for more than a decade.

Since the collapse of the developer, PWC has been fined for a quarter of 441 million yuan ($ 62 million) and was prevented from doing business for six months by the Chinese authorities, the main mainland, which said that the company was “hidden or even overlooked” in its audits if it occurred.

Although the ban has ended, PWC has lost revenues from Chinese customers who turned into competing accounts, according to the Financial Times in July. It also faces a possible lawsuit from Evergrande refineries that can be brought up at great costs, although the court files did not specify the amount of money that the liquidators may receive.

The retired PWC partner said that the company “needs to be liquid” in the midst of turmoil. People said that the batches delays apply to a wide range of partners, and not only those who worked in Evergrande audits.

PWC refused to comment on this article.

The company resigned from the Evergrande auditor in 2023. In March of last year, Beijing accused the developer and its founder Hui Ka Yan of amplifying its revenues by about 80 billion dollars during 2019 and 2020.

At least 66 PWC China Partners has left their roles in recent months, the largest wave of departure in five years.

When the partners come out, the company runs their shares at the nominal value, according to the Hong Kong shareholder agreement in the PWC, which was witnessed by FT.

All money should be paid within 12 months, with the exception of up to $ 200,000 Hong Kong ($ 25,640) which can be withheld up to 18 months after the end date.

Former partners said that the due capital can reach about 40 percent of the partners ’income in the last year, which means that it is an important amount, but it is usually not the basic pillar of their retirement plan.

Two people familiar with the situation said that payment could follow millions of dollars in Hong Kong for some major partners.

PWC is struggling to keep the main customers in China. In addition to the embargo, Chinese regulations exchange state -owned groups and companies listed on the mainland of employing auditors who have been fined in the past three years. Some of the customers listed in Hong Kong have also decreased in recent months.

The company’s unit of the company lost about two -thirds of its accounting revenues from customers listed on the mainland in the first half of last year, as mentioned by FT, which has previously confirmed its repercussions of Evergrande audits.