The lawsuit is part of an ongoing effort to recover creditors' investments after a Hong Kong court in January ordered the liquidation of Evergrande, once China's biggest real estate company.
PwC and PricewaterhouseCoopers Zhong Tian LLP -- the mainland Chinese arm of the auditing firm -- were named in a lawsuit filed in March, Bloomberg reported based on court documents.
The lawsuit targeted PwC's "negligence" and "misrepresentation" in connection to reports on Evergrande's financial statement for 2017 and the first half of 2018, the report said.
Evergrande defaulted in 2021 and has become emblematic of a years-long crisis in China's property market that had reverberated throughout the world's second-largest economy.
Chinese and Hong Kong authorities are looking into PwC, which served as Evergrande's auditor for more than a decade before resigning in 2023 amid disagreements over the audit of the firm's 2021 accounts.
PwC declined to comment, while Evergrande did not respond to AFP's request for comment.
Evergrande said earlier this week that its liquidators were seeking to recover about $6 billion in dividends and remuneration from seven people or entities, including its founder Xu Jiayin.
Xu's "spouse or former spouse" Ding Yumei, former chief executive Xia Haijun and former chief financial officer Pan Darong were also named as defendants.
The legal actions against Xu and others were filed in March and recently made public following a court order.
Trading in Evergrande's shares in Hong Kong has been suspended since January.
China property giant Evergrande seeks to recover $6 bn
Beijing (AFP) Aug 5, 2024 -
China's heavily indebted real estate giant Evergrande said Monday that it and its liquidators were seeking to recover about $6 billion in dividends and remuneration from seven people or entities, including its founder.
Evergrande was once China's biggest real estate firm, a powerhouse in a sector that helped propel the country's rapid economic growth during recent decades.
But its spiralling debt became emblematic of a prolonged crisis in the real estate sector, and, struggling to repay creditors for years, it defaulted in 2021.
Evergrande is seeking to recover "among other things, dividends and remuneration in an aggregate amount of approximately US$6 billion paid by the Company", the firm said in a statement published on the Hong Kong Stock Exchange, where it is listed.
The amount is claimed for the damage caused by alleged misrepresentations of the group's financial position between 2017 and 2020, it said.
In addition to company founder Xu Jiayin, also known as Hui Ka Yan, "his spouse or former spouse" Ding Yumei, former chief executive Xia Haijun and former chief financial officer Pan Darong, as well as three other entities associated with Xu and Ding, were named as defendants, according to the statement.
Xu is said to be under house arrest, according to press reports dating from last year, but Evergrande has never confirmed or denied the reports.
Chinese regulators said in March that they would ban him from the securities market for life on grounds of financial fraud.
The liquidators obtained injunctions restraining Xu, Ding and Xia "from dealing with, disposing of, or diminishing the value of, their worldwide assets up to various prescribed limits", according to the statement issued on Monday.
Trading in Evergrande's shares has been suspended since January and "will remain suspended until further notice", it added.
A Hong Kong court that month ordered the liquidation of the firm.
The legal proceedings "are ongoing and there is no certainty as to whether or not they will be successful and as to the amount that may ultimately be recovered", the company statement said.
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