World
China hands PwC a 6-month ban and fine over audit of the collapsed developer Evergrande
HONG KONG (AP) — Chinese authorities have banned the accounting firm PwC for six months and fined it over 400 million yuan ($56.4 million) over its involvement in the audit of collapsed property developer Evergrande.
The punishment is the heaviest yet for international accounting firms operating in China. PwC will be banned from signing off on any financial results in the country for six months. Already, it has been losing clients.
China’s Ministry of Finance said in a statement Friday that it was imposing 116 million yuan ($16.35 million) in fines and confiscation of illegal gains on PwC Zhong Tian, also known as PwC China, as well as a six-month business suspension, revocation of PwC’s Guangzhou branch and an administrative warning.
A separate regulator, the China Securities Regulatory Commission, also imposed fines and confiscations totaling 325 million yuan ($45.8 million) on PwC for allegedly failing to perform due diligence in the audit of Evergrande.
China’s finance ministry said PwC issued “false audit reports” of Evergrande and that the audit procedures had “serious defects” in design and implementation, leading to many false conclusions. It also accused PwC of not maintaining “professional skepticism” and failing to point out errors and a lack of information disclosure by Evergrande during the audits.
The securities regulator said 88% of the records kept by PwC regarding the real estate projects were inconsistent with the actual implementation and were “seriously unreliable.” When on-site investigations were carried out, some projects were still “a piece of vacant land” despite being considered to have met the delivery conditions, the regulator said.
“The work performed by PwC Zhong Tian’s Hengda audit team fell well below our high expectations and was completely unacceptable,” Mohamed Kande, global chair of PwC, said in a statement on its website. Hengda is the principal subsidiary of China Evergrande Group.
“It is not representative of what we stand for as a network and there is no room for this at PwC,” he said.
The statement said PwC Zhong Tian has cooperated fully with regulators, respects their decisions and will fully comply with the administrative penalties.
PwC China has fired six partners and five staff directly involved in the Hengda audit, it said. The firm is also in the process of issuing financial penalties for current and former firm leaders who were responsible for the business, the statement said.
PwC came under Beijing’s scrutiny after the January collapse of Evergrande, the world’s most indebted developer and a symbol of China’s ongoing property crisis.
China’s securities regulator said in March that Evergrande had inflated its mainland China revenues by almost $80 billion in 2019 and 2020. In May, authorities fined the company $577 million.
PwC had audited Evergrande’s accounts for 14 years until 2023 and gave it a clean bill of health.
PwC has been the largest of the “big four” accounting firms operating in China, taking in nearly 8 billion yuan ($1.1 billion) in revenues in 2022, above competitors Deloitte, KPMG and EY, according to the Chinese Institute of Certified Public Accountants.
China has been cracking down on excessive borrowing by developers during a prolonged property market slump that has hit many other parts of the economy, including construction, building materials and home appliances.
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Mistreanu reported from Taipei, Taiwan.
A major power outage struck southeastern France on Saturday morning, threatening to jeopardize the Cannes Film Festival’s closing celebrations, including the much-anticipated Palme d’Or ceremony.
Police said they have opened an investigation into possible arson.
Power was restored hours before the ceremony, around 3 p.m. local time, as music began blasting again from beachfront speakers. The end of the blackout was greeted with loud cheers from locals.
CAUSE OF MASSIVE EUROPEAN POWER OUTAGE UNCLEAR AS FULL SERVICE RETURNS
Staff members of the Palais Stephanie Beach inform customers following a major electricity outage, during the 78th Cannes Film Festival in Cannes, France May 24, 2025. (REUTERS/Benoit Tessier)
Earlier, about 160,000 households in the Alpes-Maritimes department lost electricity after a high-voltage line fell Saturday morning, electricity network operator RTE said on X. The outage came hours after a fire at an electrical substation near Cannes overnight had already weakened the grid.
“We are looking into the likelihood of a fire being started deliberately,” said a police spokesperson for the French national gendarmerie.
In a statement, Laurent Hottiaux, the prefect of the Alpes-Maritimes department, condemned “serious acts of damage to electrical infrastructure[s].”
PUERTO RICO HIT WITH MASSIVE ISLAND-WIDE BLACKOUT AHEAD OF EASTER WEEKEND
Employees stand outside a shop during an electricity outage in Cannes, southern France, Saturday, May 24, 2025. (AP Photo/Natacha Pisarenko)
“All resources are mobilized to identify, track down, arrest and bring to justice the perpetrators of these acts,” said Hottiaux.
Cannes Film Festival organizers confirmed the outage affected the early activities of Saturday and said the Palais des Festivals — the Croisette’s main venue — had switched to an independent power supply.
“All scheduled events and screenings, including the Closing Ceremony, will proceed as planned and under normal conditions,” the statement said. “At this stage, the cause of the outage has not yet been identified. Restoration efforts are underway.”
Traffic lights are switched off during an electricity outage in Cannes, southern France, Saturday, May 24, 2025. (AP Photo/Lewis Joly) (AP Photo/Lewis Joly)
Traffic lights in parts of Cannes and the surrounding city of Antibes stopped working after 10 a.m., leading to traffic jams and confusion in city centers. Most shops along the Croisette remained closed, and local food kiosks were only accepting cash. Train service in Cannes was also disrupted.
Screenings at the Cineum, one of the festival’s satellite venues, were briefly suspended, the festival added.
The Palme d’Or — the festival’s most prestigious prize — was set to be awarded Saturday night, with top contenders including Joachim Trier’s family drama “Sentimental Value,” Jafar Panahi’s revenge thriller “It Was Just an Accident,” Kleber Mendonça Filho’s political thriller “The Secret Agent,” and Óliver Laxe’s desert road trip “Sirât.”
Hundreds of residents remain in evacuation centres, with 52 rescues made overnight despite conditions easing.
Prime Minister Anthony Albanese has announced the start of a cleanup operation in eastern Australia after record-breaking floods killed five people and stranded tens of thousands of people.
Damage assessments are under way for the coastal region of New South Wales in the east, where at least 10,000 properties are thought to have been damaged, the state’s emergency services agency said on Saturday.
Conditions have eased since Friday after days of relentless rain isolated towns, swept away livestock and destroyed homes, the agency added.
“We’re continuing to work closely across federal, state and local governments to make sure Australians get the support they need now and through recovery,” Albanese posted on X.
Despite improving conditions, hundreds of residents remain in evacuation centres with 52 rescues made overnight, State Emergency Services commissioner Mike Wassing said.
The death toll from flooding rose to five after a man in his 80s was found at a flooded property about 50km (32 miles) from Taree, one of the worst-hit towns, police said.
It’s “awful to hear the news of more loss of life”, Albanese said after being forced to cancel his trip to Taree on Friday due to floodwaters.
At their worst, the flooding isolated about 50,000 people and submerged roads in the country’s most populous state.
Coastal areas were left littered with debris and dead animals after a powerful storm system dumped months’ worth of rain in three days.
Train services, including airport services, were affected by flooded tracks. Sydney airport shut two of its three runways for an hour on Friday morning, delaying flights.
Australia has suffered a series of extreme weather events in recent years, which experts have attributed to climate change.
Frequent flooding has caused widespread devastation in the country since early 2021, following droughts and bushfires at the end of the last decade.
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