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.

President Vladimir Putin has warned that if Western nations allow Ukraine to use long-range weapons to strike inside Russia then it will mean NATO would be “at war” with his country.

“This would in a significant way change the very nature of the conflict. It would mean that NATO countries, the US, European countries, are at war with Russia,” Putin told Russian state TV on Thursday.

“And if this is so, then, bearing in mind the change in the very essence of this conflict, we will make appropriate decisions based on the threats that will be created for us,” he said.

His comments come ahead of a meeting in Washington, DC, on Friday between British Prime Minister Keir Starmer and US President Joe Biden, who are expected to discuss giving Ukraine the go-ahead to strike targets inside Russia amid mounting concerns over its losses on the battlefield.

Ukrainian President Volodymyr Zelenskyy has repeatedly called for restrictions on Western-supplied, long-range weapons to be lifted so his forces can target airfields, ammunition depots and command centres deep inside Russia, also increasing the costs of the invasion for Moscow.

Speaking to reporters en route to the US, Starmer said, “Russia started this conflict. Russia illegally invaded Ukraine. Russia can end this conflict straight away. Ukraine has the right to self-defence”, according to British media reports.

It will likely be the last meeting between the US and British leaders before Biden leaves office and ahead of the US presidential election in November that will pit Democrat Kamala Harris against Republican Donald Trump.

Trump repeatedly refused to take sides on the war, which started with Russia’s full-scale invasion of Ukraine in 2022, during a debate with Harris this week, saying only: “I want the war to stop.”

Biden said he was “working” on Ukraine’s request as US Secretary of State Antony Blinken and British Foreign Secretary David Lammy made a rare joint visit to the Ukrainian capital, Kyiv, where they announced $1.5bn in additional aid.

Blinken wrapped up a three-nation, Ukraine-focused European tour in Poland on Thursday after hearing repeated appeals from Ukrainian officials to use Western-supplied weaponry for long-range strikes inside Russia.

“As what Russia’s doing has changed, as the battlefield has changed, we’ve adapted,” Blinken said at a news conference in Warsaw.

Biden has allowed Ukraine to fire US-provided missiles across the border into Russia in self-defence but has largely limited the distance they can be fired.

One of the key requests from Ukraine is to strike with US-produced Army Tactical Missile Systems (ATACMS).

But the Pentagon has said they wouldn’t be the answer to the main threat Ukraine faces from long-range Russian glide bombs, which are being fired from more than 300km (186 miles) away, beyond the ATACMS reach.

On Friday, Donald Tusk, the prime minister of NATO member Poland, which shares a border with Ukraine, said he was not worried by Putin’s comments.

“It is necessary to take all events in Ukraine and on the Ukrainian-Russian front very seriously, but I would not attach excessive importance to the latest statements from President Putin,” Tusk told a news conference.

“They rather show the difficult situation the Russians have on the front.”

Polish Foreign Minister Radowslaw Sikorski had previously said Kyiv should be allowed to use Western weapons in self-defence because “Russia is committing war crimes by attacking civilian targets”.

“Missiles that hit these civilian targets are fired from bomber aircraft from over the territory of Russia. These bombers take off from airfields on Russia’s territory,” Sikorski said.

Russian forces have ramped up pressure on the battlefield in eastern Ukraine’s Donetsk region and increased air attacks across the country.

Ukraine was pressing on with attacks in western Russia’s Kursk region following its surprise cross-border incursion on August 6, but Zelenskyy confirmed on Thursday that Moscow’s troops were mounting a counteroffensive.